Cabinet has approved the sale of 2251.25 MHz of spectrum across seven frequency bands at a reserve price of Rs 3.92 lakh crore. However, the auctions are only for 4G services, as the Department of Telecommunications (DoT) is yet to finalize the spectrum bands for auction of 5G spectrum, according to a report by Indian Express. A notice will be issued later this month inviting applications from telecom service providers. The government hopes to complete the sale by March 2021, Telecom Minister Ravi Shankar Prasad said.
Experts believe that the new round of auctions is likely to provide a boost to government revenue
collections at a time when its inflows from other sources such as direct taxes, indirect taxes such as goods and services tax, have fallen sharply on account of restrictions to prevent the spread of Covid-19.
It is important to note that the reserve price of spectrum being auctioned in this round — in the 700, 800, 900, 1,800, 2,100, 2,300, and 2,500 MHz bands — are lower than the Telecom Regulatory Authority of India’s (TRAI’s) recommendations, which were accepted by the Digital Communications Commission (DCC), the highest executive decision-making body of the DoT.
On December 20, 2019, the DCC had approved the sale of 8,300 MHz spectra across 22 licensed spectrum access (LSA) or telecom circles. It had then decided to accept all the recommendations made by TRAI, including keeping the reserve price at Rs 5.22 lakh crore.
The reduced price of spectrum is in line with the demands made by the three major private telecom service providers, who had expressed reservations on the Rs 5.22 lakh crore reserve price accepted by the DCC. Of the three, Bharti Airtel and Vodafone Idea (Vi) had said they would not be able to bid for spectrum in the new auctions due to high reserve prices.
