India’s DoT preparing for another mega spectrum sale

India’s telecom department has set the stage for another mega spectrum sale by sending a reference to the sector regulator, seeking fresh base prices for the gamut of airwave bands, including key frequencies like 700 MHz, 3.3-3.6 GHz and the coveted millimeter waves such as 26 GHz and 28 GHz that support 5G technology (but have not been agreed upon in revision 6 of ITU-R M.1036 Frequency Arrangements for Terrestrial IMT).

India’s Department of Telecommunications (DoT) has also sought fresh base prices for 4G airwave bands such as 800 MHz, 900 MHz, 1800 MHz, 2100 MHz and 2300 MHz, two people aware of the matter said. But with the time usually taken for the consultation process, sources say it may be tough to meet government’s auction timeline of January-February, 2022.

The reference comes at a time when the government has acknowledged that high spectrum pricing is a prime reason behind the acute financial stress in the debt-laden telecom industry, and is also open to price rationalization in public interest.

In its reference, the department has sought recommendations from the Telecom Regulatory Authority of India (Trai) on the terms of reference for the next auction and the quantum of airwaves proposed to be auctioned, one of the persons cited told ET.

“We have received a detailed reference from DoT about 2-3 days back, seeking our recommendations on spectrum matters and pricing…there are a number of spectrum bands involved, and the Authority is currently examining the reference and will respond to the government,” Trai secretary V Raghunandan told ET. He, though, declined to share details.

Sector analysts expect the potential annual cash flow relief stemming from the four-year moratorium allowed on statutory payouts to give Bharti Airtel and Reliance Jio the financial headroom to participate aggressively in the next spectrum auction. They, though, don’t expect Vodafone Idea (Vi) to participate as strongly if it’s unable to close its much delayed Rs 25,000-crore fundraise.

Another official said that Trai will need to seek additional details from the DoT, before proceeding with its analysis and starting the consultation process.

After a DoT reference, Trai conducts a process which includes a four-week period for stakeholders to submit their views after a consultation paper is floated, followed by two weeks for counter comments. Then Trai holds open-house discussions before arriving at its recommendations. The whole process usually takes about four-five to months at least.

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On March 1, India concluded its first spectrum auction of 2021. India’s Department of Telecom (DoT), through a Notice Inviting Applications (NIA) issued in January 2021, had put up spectrum for auction in multiple bands, including 700, 800, 900, 1800, 2100, 2300 and 2500 MHz bands. These frequencies cut across 2G, 3G and 4G service bands and included both FDD (paired) and TDD (unpaired) bands.

The auction was a qualified success. It netted the Government $10.6 billion and was almost double initial estimates. However, barely 37% of the total spectrum put up for auction had takers, while the 700 MHz band saw no bids at all.

The main takeaway from this auction is that the focus of India’s telcos is currently on 4G, not 5G. With several licenses coming up for renewal, it was imperative that telcos bid on expiring spectrum to renew but also to consolidate with new holdings. The biggest bidders were Reliance Jio ($7.8 billion), Bharti Airtel ($2.55 billion), followed by VodafoneIDEA a distant third with bids worth $272 million.

There was heavier than expected bidding in the 800 MHz band as well as the 2300 MHz band. All of the three operators bidding have taken different approaches to this auction. The common theme for both Jio and Airtel’s auction strategies was to shore up existing spectrum, acquire new frequencies to consolidate holdings per circle and boost capacity, and lay the groundwork for an eventual 5G network launch.

For its part, Vodafone IDEA (VIL) has taken a very frugal, optimization strategy to spectrum. Their public position has been that they have abundant spectrum and therefore are not hard-pressed to bid aggressively. This is true, with VIL holding ample spectrum, but there is no doubt that they would have had very limited means due to a stressed balance sheet.

Reference:

https://telecom.economictimes.indiatimes.com/news/dot-gearing-up-for-another-mega-spectrum-sale/86469701

https://www.fiercewireless.com/operators/india-s-recent-spectrum-auction-opening-opportunities-putcha

One thought on “India’s DoT preparing for another mega spectrum sale

  1. The Telecom Regulatory Authority of India (TRAI) has reportedly informed the Department of Telecommunications (DoT) that it is likely to submit 5G pricing recommendations in March. If things go as planned, India will hold its repeatedly delayed 5G auction in July-August 2022.

    Despite the buzz around 5G, telecom companies, along with private players, are only conducting 5G trials in the country.

    Bharti Airtel has successfully conducted India’s first 5G trial in the 700 MHz band in partnership with Nokia, on the outskirts of Kolkata.

    Earlier last year, Airtel demonstrated India’s first 5G experience over a live 4G network. It also demonstrated India’s first rural 5G trial as well as the first Cloud gaming experience on 5G.

    Reliance Jio is another leading player in the field of 5G testing technology. The company has successfully conducted trials of connected drones on its indigenous 5G network. According to Mukesh Ambani, Chairman and Managing Director, Reliance Industries Limited (RIL), India must complete the migration from 2G to 4G to 5G at the earliest and the rollout of 5G should be India’s national priority.

    Jio says it has developed a 100 per cent home-grown and comprehensive 5G solution, which is fully Cloud native and digitally managed.

    “Because of its converged, future-proof architecture, Jio’s network could be quickly and seamlessly upgraded from 4G to 5G,” according to Ambani.

    Nokia and Vodafone Idea have also partnered to trial 5G services using E-band in areas where fibre is challenging to deploy.

    Vodafone Idea is currently conducting 5G trials in India using the trial spectrum in the 3.3GHz-3.6GHz band and mmWave band (24.25GHz-28.5GHz). Earlier, Vodafone Idea had achieved peak speed of over 3.7 Gbps during its 5G trials in Pune.

    The DoT had approved applications of Reliance Jio, Bharti Airtel, Vodafone and MTNL for 5G trials.

    The 5G technology will represent around 39 per cent of mobile subscriptions in India at the end of 2027, estimated at about 500 million subscriptions, according to an Ericsson report.

    https://economictimes.indiatimes.com/industry/telecom/telecom-policy/why-india-must-take-first-step-towards-5g-rollout-this-year/articleshow/88643748.cms

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