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5G spectrum sale may be deferred to early 2020

Pending appointment of auctioneer and work on draft documents said to be key reasons

, ET Bureau|
Aug 27, 2019, 06.55 AM IST
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BCCL
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NEW DELHI: Spectrum sale, including that of 5G airwaves, is likely to be pushed back to early 2020, given that the auctioneer will only be appointed by October 10, and major work on the draft auction documents is still pending, with the telecom department yet to take a call on airwave quantity and pricing, say officials and industry executives.

“The timeline may be delayed by around a month, give or take,” said a Department of Telecommunications (DoT) official, who did not want to be named.

The DoT had initially in June outlined plans to hold the next spectrum sale — first since 2016 — by December 2019.

“It looks realistically difficult... extremely tight for auctions to begin by the year end,” said Rajan Mathews, director general at Cellular Operators Association of India (COAI), which represents all carriers in the country.

DoT on Monday invited bids for selecting an auctioneer by September 25.

The final selection will take place by October 10. The auctioneer’s appointment is typically followed by the government issuing the Notice Inviting Application (NIA) — the document formalising the terms and conditions of the auctions which includes the price and quantum of spectrum to be sold.

Typically, auctions are held about 60-90 days from the time the NIA is issued. However, the preparation of the NIA itself is taking time, with the DoT yet to take a call on recommendations on spectrum pricing and quantum given by the Telecom Regulatory Authority of India (Trai).

The last spectrum sale began on October 1, 2016, a little under two months from the day the NIA was issued. Since the term of the auctioneer lasts for three years, extendable by a year, the appointment of the auctioneer was not a time taking process back then. This time though, a new auctioneer needs to be named.

Besides, “Trai’s recommendations are yet to be approved by the Digital Communications Commission (DCC)”, the official added.

Trai had suggested that DoT sells all available airwaves across all bands at a total reserve price of ?5.6 lakh crore. With carriers calling the suggested base price of airwaves — especially the 5G pricing of Rs 492 crore a unit for spectrum in the 3300 MHz-3600 MHz bands — too expensive, the DoT asked Trai to reconsider its recommendations. However, the sector regulator has since stuck to its stand and instead put the onus of the success of the auctions on the government.

The DCC is yet to take a decision on the Trai’s pricing.

The auctioneer is responsible for conducting the spectrum sale, which this year will include 4G airwaves in 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2300 MHz and 2500 MHz bands, and a sale of 5G spectrum for the first time in the 3.3-3.6 GHz band.

Industry executives said a rushed move by DoT to hold the spectrum sale within 2019 would not be a wise decision as the players keen to bid in these auctions would require adequate time to go over the terms and conditions in the NIA, among other reasons.

“For starters, the auctioneer needs to be picked. Then, the NIA has to be put together, which is done with the conformity with the auctioneer and how the auction will work, which can take couple of weeks,” an industry executive said. Once the NIA document comes out, the government has to give 30 days for reviewing of this document, including clarifying industry queries.

“There should always be adequate time to review the NIA, so if the government pushes for the December deadline, it could lead to ambiguities which could give rise to subsequent implementation delays or worst case, litigation,” Mathews added.

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