The government hasn’t set any clear timelines, with telecom secretary Aruna Sundararajan saying only that the 5G spectrum sale is expected in the second half of 2019.
New Delhi: Vodafone Idea, Bharti Airtel and Reliance Jio Infocomm are sharply divided over the timing of spectrum auctions and the pricing of airwaves, setting the stage for intense lobbying as the Department of Telecommunications prepares the roadmap for the next sale.
Jio wants all available bandwidth to be offered immediately and has no problems with the prices recommended by the Telecom Regulatory Authority of India. Second-ranked Bharti Airtel wants a “swift” auction but only of 4G airwaves in the year ending March 2019 at reduced starting prices and it backed a 5G spectrum sale only in FY20. Market leader Vodafone Idea does not want any auction until 2020 and has called on the government to fix the health of the telecom sector in the interim.
The government hasn’t set any clear timelines, with telecom secretary Aruna Sundararajan saying only that the 5G spectrum sale is expected in the second half of 2019. DoT officials privately say that an auction is unlikely in FY19, given that the industry is burdened with debt of over Rs 7 lakh crore, but don’t rule out a staggered sale, especially if it’s needed to cater to the government’s fiscal needs in an election year
Mukesh Ambani-owned Jio, which started services a little over two years ago, rejected any move to delay a sale.
“We are interested in acquiring more spectrum and expect the government to auction spectrum available with it at the earliest,” Mathew Oommen, president of Jio, told ET.
He added that the government should auction airwaves regularly so that telcos are able to optimise their networks and ensure the highest quality of service.
Jio’s eagerness is understandable, given that the company has to cater to surging demand, mainly for data, from its rapidly increasing subscriber base. It has added users at a record pace – over 13 million in September – to close the month with over 252 million users. The same month, its two main rivals lost close to 9 million users.
While Oommen didn’t respond to ET’s query on pricing, sources said Jio accepts the rates recommended by Trai.
In August, Trai recommended the auction of airwaves across seven 4G bands, besides 5G spectrum. The regulator slashed the base price of the premium 700 MHz band by 43% to Rs 6,568 crore a unit and set Rs 492 crore per unit as the minimum rate for 5G.
Bharti Airtel is keen on buying 4G airwaves in this financial year, but wants a reduction in prices, the telco said in a statement to ET.
“We would request Trai and DoT to review the reserve price of spectrum in sub-GHz bands,” the company said.
Airtel also sought reserve prices for spectrum across all circles since harmonisation of airwaves – or making airwaves available in continuous blocks – and taking back spectrum from those that have shut operations could lead to availability of bandwidth in all service areas.
Jio’s Oommen rejected Airtel’s contention for a 5G sale to be deferred.
The practice of auctioning all spectrum, whenever available, as endorsed by the Supreme Court and Trai and consistent with the National Digital Communications Policy 2018, “is a prudent policy and will go a long way in ensuring certainty, transparency and policy stability,” Oommen said.
According to SS Sirohi, a former senior DoT official who was part of the Telecom Commission, the government is bound to auction all available airwaves immediately.
“The Supreme Court has told the government to auction whatever spectrum is available with it and the government also gave an undertaking to the apex court to do so. It can’t hoard spectrum,” said Sirohi. He said airwaves lying vacant with the government meant loss of money to the exchequer.
Vodafone Idea, with debt of over 1 lakh crore and in the midst of a costly and time-taking integration after their merger, is in no mood to buy additional bandwidth.
“Telecom service providers are currently spectrum-sufficient and focused on optimising 4G and making their networks 5G-ready. Once the 5G ecosystem and enabling hardware is suitably developed and India-specific use cases successfully piloted, the need for more quality spectrum will arise. This is likely to take up to 2020,” the company said in a statement to ET.
The telco asked the government to make spectrum “affordable and available.”
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