Telecom

5G spectrum prices should be kept much lower: Industry body to TRAI

As per the latest report, IAFI recommended that the reserve price for 700 MHz should be Rs 500 crores.

Published:Tue, January 11, 2022 11:34am

By Deepti Ratnam

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ITU-APT Foundation of India or IAFI, a non-profit telecom industry association, has asked TRAI to lower the prices of the 5G spectrum. The IAFI suggested in its official consultation papers whether it is below 6 GHz band or millimeter-wave (mmWave) bands above 24 GHz, the prices should be kept reasonable for telecom operators.

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As per the latest report, IAFI recommended that the reserve price for 700 MHz should be Rs 500 crores. However, for the C-band, it should be Rs 100 crores. It is important to note that the non-profit telecom authority suggested that for the mmWave band, the price should be Rs 80 crores per 10MHz for nationwide spectrum.

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"In the previously failed auctions of 700 MHz, the average reserve price fixed for the auction in 700 MHz in Feb 2021 was about $1.89 per MHz per pop (adjusted for PPP), which is 34 times higher than that set Internationally ($0.05) and is also higher than the mean winning bid price witnessed worldwide ($0.54)" IAFI said in its submission.

Earlier, cellular service providers have demanded the Indian government to cut its base price by more than half. The government offered a 2308.80 MHz spectrum in seven bands, with a reserve price of around Rs 4 lakh crore during the spectrum auction held in March 2021. However, it is worth noting that the premium category of 700 MHz and 2,500 MHz bands remained unsold due to the higher price base.

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In addition, the government could not even auction the spectrum of 3.3-3.6 GHz frequency as the base price of this band was also said to be too expensive for 5G services.

Telecom regulator TRAI has fixed the base price for MHz in a 3.3-3.6 GHz spectrum at Rs 492 crore, which means operators will have to pay Rs 9,840 crore on an all-India basis to buy spectrum.

However, the auction of 700 MHz frequencies held in February 2021 also failed, set up for $ 1.89 per MHz per POP. The price was 34 times more than the internationally set reserved price of $ 0.05. To recall, the price charged for the C-band spectrum in India is $0.05 per MHz per POP, which is too high compared to the prices set globally.

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