\"<p>In
In its 436-page recommendations Monday, the Telecom Regulatory Authority of India (Trai) cut the base rate of 3.3-3.67 Ghz airwaves–popularly known as mid-band 5G spectrum–to Rs 317 crore a unit, from Rs 492 crore a unit. It also reduced the price of the 700 MHz band to Rs 3,927 crore, in the hope that the price will attract bids after telcos gave this bandwith a pass for two successive sales, citing high prices.<\/span><\/figcaption><\/figure>New Delhi: Telecom stocks fell in morning trade, with experts saying that the telecom regulator’s fresh prices for existing bands are still too steep. Reliance Industries, the parent of telecom market leader Reliance Jio<\/a>, was trading 1.5% lower, while Bharti Airtel<\/a> was down 1.1% and Vodafone Idea<\/a> lost 3%.

Late Monday, the Telecom Regulatory Authority of India (Trai) recommended slashing the base price of premium 3.3-3.67 Ghz airwaves by nearly 36% and cutting the rate of the coveted 700 Mhz spectrum by 40% in a bid to spur India's mobile phone companies to bid aggressively in the upcoming
5G<\/a> airwaves sale.

In its 436-page recommendations Monday, the Telecom Regulatory Authority of India (Trai) cut the base rate of 3.3-3.67 Ghz airwaves–popularly known as mid-band
5G<\/a> spectrum–to Rs 317 crore a unit, from Rs 492 crore a unit. It also reduced the price of the 700 MHz band to Rs 3,927 crore, in the hope that the price will attract bids after telcos gave this bandwith a pass for two successive sales, citing high prices.

Trai also set rates for new bands in the 600 MHz and millimetre wave (mmWave)–24.25-28.5 GHz–bands, at Rs3,927 crore a unit and Rs7 crore per MHz, respectively. Besides, Trai also recommended fresh starting prices for the 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz bands, all of which can be used for 5G in the future.

Prashant Singhal, EY's global TMT emerging markets leader, said while the suggested reserve price of C-band 5G spectrum (3.3-3.67 Ghz) has been reduced, it's still on the higher side vis-a-vis global benchmarks.

For instance, “the Trai-recommended Rs 317 crore per MHz reserve price of C-band 5G spectrum is effectively around $40 million per Mhz, which is several times above the $16 million per Mhz, $11 million per Mhz and $10 million per Mhz pricing of these airwaves in Germany, UK and South Korea, respectively,” Singhal said.

He added that “the overall recommended spectrum reserve prices are likely to be perceived as stiff by Indian telcos, given that Germany and UK's annual telecom revenues are around 1.8 times and 1.5 higher than India's, respectively.” He also expects telcos to give the 700 MHz band a miss for the third straight time.

The Trai recommendations will now go to the Digital Communications Commission (DCC) – the highest decision-making body in the telecom department – which will take a decision on the final pricing, which will be taken to the Cabinet for final approval.

The spectrum sale–expected to be held in 45-60 days–is set to be the largest ever with over 104,000 MHz of airwaves valued at under Rs 2 lakh crore on sale. However, a senior telecoms consultant said the total value of the airwaves on offer could exceed Rs 3 lakh-crore once there is visibility on the exact quantum of spectrum available in the 600 MHz, 3.3-3.67 GHz and the millimetre wave (mmWave) bands.

Experts expect the government to mop up around Rs65,000-68,000 crore from the auction, with telcos likely to focus on the 3.3-3.67 Ghz band and also mmWave bands, which are useful for both backhaul and hotspots. Jio and Airtel are likely to be the main bidders with limited bidding from cash-strapped
Vodafone Idea<\/a>, they said.

The regulator has also proposed direct allocation of earmarked spectrum for captive private network licence holders and said that telcos should be allowed to lease spectrum to them.

The reserve price across various bands works out to be nearly 39% lower on average than what was suggested the last time, in August 2018, according to people familiar with the matter. Telcos had, however, asked for slashing the price of the 5G airwaves in the 3.3-3.67 Ghz and 700 MHz airwaves by as much as 95%.

The pricing recommendations were for spectrum with a 20-year tenure. “The reserve price of spectrum allocation in the case of 30 years should be equal to 1.5 times the reserve price of spectrum allocation for 20 years for the respective band.”

It added that for the long-term growth and sustainability of the telecom sector, infusing liquidity and encouraging investment, the carriers should be allowed easy payment options including part payment with flexibility of moratorium.

“DoT (Department of Telecommunications) has emphasised the need to strike a balance between generating revenue and the sustainability of the telecom sector in a way that TSPs (telecom service providers) are in good health with sufficient capacities to make regular and substantial capital expenditure for transitioning to 5G technology,” Trai said.

Referring to the DoT’s letter, the regulator has said that only 37.1% of the spectrum put up for sale in the previous auction was acquired by telcos and that spectrum lying idle is a waste for the economy. “Thus, the inputs received by the authority during the consultation process also point to the need for further rationalisation of the reserve price,” the regulator said.

At the last sale in March 2021, the government had mopped up just Rs 77,814 crore, selling only 37% of the over 2,300 units of airwaves across seven bands on sale. Thus, it had urged the regulator to take a hard look at the pricing methodology and alter it to increase the uptake of airwaves.

On Monday, Trai pegged the base rate of airwaves in the efficient 800 Mhz band at Rs 3,620 crore a unit, down 22% from the previous sale, while that for the 2100 Mhz spectrum was lowered by 56% to Rs 1,486 crore per unit. The starting rate for 1800 Mhz spectrum was cut around 36% to Rs 2,116 crore a unit.

The government had been pushing Trai to send its pricing recommendations by March end itself, so that it can hold the much-awaited 5G spectrum sale in May-June. The government wants initial 5G rollouts by August 15, India’s independence day.

The regulator has further called for rationalisation of spectrum caps in the runup to the 5G airwaves sale. It has proposed a 40% cap on combined spectrum holding in sub-1 GHz bands, a 40% cap on combined airwave holdings in the 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz bands. It has recommended an individual band-specific cap of 40% for 5G bands such as 3.3-3.67 GHz and the mmWave bands. But it has suggested scrapping overall limits across all bands.

\"Trai<\/a><\/figure>

Trai slashes base price of 33-36 GHz bands, 700 MHz bands<\/a><\/h2>

In its 436-page recommendations Monday, the Telecom Regulatory Authority of India (Trai) cut the base rate of 3.3-3.67 Ghz airwaves–popularly known as mid-band 5G spectrum–to Rs 317 crore a unit, from Rs 492 crore a unit. It also reduced the price of the 700 MHz band to Rs 3,927 crore, in the hope that the price will attract bids after telcos gave this bandwith a pass for two successive sales, citing high prices.<\/p><\/div>

\"&lt;p&gt;In
In its 436-page recommendations Monday, the Telecom Regulatory Authority of India (Trai) cut the base rate of 3.3-3.67 Ghz airwaves–popularly known as mid-band 5G spectrum–to Rs 317 crore a unit, from Rs 492 crore a unit. It also reduced the price of the 700 MHz band to Rs 3,927 crore, in the hope that the price will attract bids after telcos gave this bandwith a pass for two successive sales, citing high prices.<\/span><\/figcaption><\/figure>New Delhi: Telecom stocks fell in morning trade, with experts saying that the telecom regulator’s fresh prices for existing bands are still too steep. Reliance Industries, the parent of telecom market leader Reliance Jio<\/a>, was trading 1.5% lower, while Bharti Airtel<\/a> was down 1.1% and Vodafone Idea<\/a> lost 3%.

Late Monday, the Telecom Regulatory Authority of India (Trai) recommended slashing the base price of premium 3.3-3.67 Ghz airwaves by nearly 36% and cutting the rate of the coveted 700 Mhz spectrum by 40% in a bid to spur India's mobile phone companies to bid aggressively in the upcoming
5G<\/a> airwaves sale.

In its 436-page recommendations Monday, the Telecom Regulatory Authority of India (Trai) cut the base rate of 3.3-3.67 Ghz airwaves–popularly known as mid-band
5G<\/a> spectrum–to Rs 317 crore a unit, from Rs 492 crore a unit. It also reduced the price of the 700 MHz band to Rs 3,927 crore, in the hope that the price will attract bids after telcos gave this bandwith a pass for two successive sales, citing high prices.

Trai also set rates for new bands in the 600 MHz and millimetre wave (mmWave)–24.25-28.5 GHz–bands, at Rs3,927 crore a unit and Rs7 crore per MHz, respectively. Besides, Trai also recommended fresh starting prices for the 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz bands, all of which can be used for 5G in the future.

Prashant Singhal, EY's global TMT emerging markets leader, said while the suggested reserve price of C-band 5G spectrum (3.3-3.67 Ghz) has been reduced, it's still on the higher side vis-a-vis global benchmarks.

For instance, “the Trai-recommended Rs 317 crore per MHz reserve price of C-band 5G spectrum is effectively around $40 million per Mhz, which is several times above the $16 million per Mhz, $11 million per Mhz and $10 million per Mhz pricing of these airwaves in Germany, UK and South Korea, respectively,” Singhal said.

He added that “the overall recommended spectrum reserve prices are likely to be perceived as stiff by Indian telcos, given that Germany and UK's annual telecom revenues are around 1.8 times and 1.5 higher than India's, respectively.” He also expects telcos to give the 700 MHz band a miss for the third straight time.

The Trai recommendations will now go to the Digital Communications Commission (DCC) – the highest decision-making body in the telecom department – which will take a decision on the final pricing, which will be taken to the Cabinet for final approval.

The spectrum sale–expected to be held in 45-60 days–is set to be the largest ever with over 104,000 MHz of airwaves valued at under Rs 2 lakh crore on sale. However, a senior telecoms consultant said the total value of the airwaves on offer could exceed Rs 3 lakh-crore once there is visibility on the exact quantum of spectrum available in the 600 MHz, 3.3-3.67 GHz and the millimetre wave (mmWave) bands.

Experts expect the government to mop up around Rs65,000-68,000 crore from the auction, with telcos likely to focus on the 3.3-3.67 Ghz band and also mmWave bands, which are useful for both backhaul and hotspots. Jio and Airtel are likely to be the main bidders with limited bidding from cash-strapped
Vodafone Idea<\/a>, they said.

The regulator has also proposed direct allocation of earmarked spectrum for captive private network licence holders and said that telcos should be allowed to lease spectrum to them.

The reserve price across various bands works out to be nearly 39% lower on average than what was suggested the last time, in August 2018, according to people familiar with the matter. Telcos had, however, asked for slashing the price of the 5G airwaves in the 3.3-3.67 Ghz and 700 MHz airwaves by as much as 95%.

The pricing recommendations were for spectrum with a 20-year tenure. “The reserve price of spectrum allocation in the case of 30 years should be equal to 1.5 times the reserve price of spectrum allocation for 20 years for the respective band.”

It added that for the long-term growth and sustainability of the telecom sector, infusing liquidity and encouraging investment, the carriers should be allowed easy payment options including part payment with flexibility of moratorium.

“DoT (Department of Telecommunications) has emphasised the need to strike a balance between generating revenue and the sustainability of the telecom sector in a way that TSPs (telecom service providers) are in good health with sufficient capacities to make regular and substantial capital expenditure for transitioning to 5G technology,” Trai said.

Referring to the DoT’s letter, the regulator has said that only 37.1% of the spectrum put up for sale in the previous auction was acquired by telcos and that spectrum lying idle is a waste for the economy. “Thus, the inputs received by the authority during the consultation process also point to the need for further rationalisation of the reserve price,” the regulator said.

At the last sale in March 2021, the government had mopped up just Rs 77,814 crore, selling only 37% of the over 2,300 units of airwaves across seven bands on sale. Thus, it had urged the regulator to take a hard look at the pricing methodology and alter it to increase the uptake of airwaves.

On Monday, Trai pegged the base rate of airwaves in the efficient 800 Mhz band at Rs 3,620 crore a unit, down 22% from the previous sale, while that for the 2100 Mhz spectrum was lowered by 56% to Rs 1,486 crore per unit. The starting rate for 1800 Mhz spectrum was cut around 36% to Rs 2,116 crore a unit.

The government had been pushing Trai to send its pricing recommendations by March end itself, so that it can hold the much-awaited 5G spectrum sale in May-June. The government wants initial 5G rollouts by August 15, India’s independence day.

The regulator has further called for rationalisation of spectrum caps in the runup to the 5G airwaves sale. It has proposed a 40% cap on combined spectrum holding in sub-1 GHz bands, a 40% cap on combined airwave holdings in the 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz bands. It has recommended an individual band-specific cap of 40% for 5G bands such as 3.3-3.67 GHz and the mmWave bands. But it has suggested scrapping overall limits across all bands.

\"Trai<\/a><\/figure>

Trai slashes base price of 33-36 GHz bands, 700 MHz bands<\/a><\/h2>

In its 436-page recommendations Monday, the Telecom Regulatory Authority of India (Trai) cut the base rate of 3.3-3.67 Ghz airwaves–popularly known as mid-band 5G spectrum–to Rs 317 crore a unit, from Rs 492 crore a unit. It also reduced the price of the 700 MHz band to Rs 3,927 crore, in the hope that the price will attract bids after telcos gave this bandwith a pass for two successive sales, citing high prices.<\/p><\/div>