The Telecom Regulatory Authority of India (TRAI) issued comprehensive recommendations on Tuesday for the upcoming auction of radiowaves. The regulatory body proposed the auctioning of all available spectrum across multiple frequency bands. The framework is designed to encourage competition, reduce entry barriers for new participants, and expand digital connectivity to underserved regions.
Auction Scope and Valuation
The recommendations outline the scale and the financial framework for the forthcoming spectrum sale.
- Spectrum Availability: TRAI recommended that all available spectrum across nine frequency bands should be put up for auction. This includes the 600 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300 MHz, and 26 GHz bands.
- Estimated Revenue: Industry calculations indicate that if the entire spectrum on offer (excluding the 600 MHz band) is sold at the reserve price, it could generate approximately ₹81,000 crore for the exchequer.
- Pricing Adjustments: The reserve prices for most Licensed Service Areas (LSAs) and band combinations have been set lower than the 2022 auctions. For bands that remained unsold in previous auctions, the reserve price has been fixed at 60 percent of the last discovered price.
Regulatory Framework and Entry Barriers
The telecom regulator proposed significant changes to the eligibility criteria and market caps to foster a competitive environment.
- Lower Entry Barriers: To encourage the entry of new players, TRAI recommended halving the net worth criteria for new entrants from ₹100 crore to ₹50 crore per LSA. For regions like Jammu and Kashmir and the northeast, the criteria have been reduced from ₹50 crore to ₹25 crore.
- Uniform Spectrum Cap: A uniform spectrum cap of 35 percent has been proposed across all frequency bands. Operators who currently exceed this cap will not be required to surrender their existing holdings.
- Reclaiming Spectrum: TRAI urged the Department of Telecommunications (DoT) to immediately reclaim spectrum held by telecom providers currently undergoing insolvency proceedings so that these airwaves can be included in the upcoming auction.
Incentives and Rural Expansion
The recommendations include specific measures to promote the uptake of certain bands and improve rural network coverage.
- 600 MHz Band Incentives: To incentivize participation in the 600 MHz band, TRAI suggested extending the validity period to 24 years instead of the standard 20 years. The regulator also proposed a four-year moratorium on payments and a four-year delay in rollout obligations for this specific band.
- Coverage-for-Discount Scheme: A novel incentive has been proposed allowing successful bidders to offset up to 10 percent of their spectrum costs by expanding services into "dead zones." Operators can receive this discount in exchange for deploying new base stations in government-identified coverage holes within one year.
- Infrastructure Sharing: Any telecom towers built under the coverage-for-discount scheme must be shared with competing telecom operators at a fair price to ensure comprehensive access for consumers in previously unserved areas.
Status of the 6 GHz Band
The upper 6 GHz band (6425-7125 MHz) will be reserved for mobile services (IMT) but will not be included in the forthcoming auction. This band will undergo technical trials to ensure that its use does not cause interference with existing satellite stations.
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