Niti Aayog Advices to Lower Price for 5G spectrum

niti Niti Aayog, the government’s think tank, has suggested that 5G spectrum should be given to telecom operators for a 30-year period but basis the reserve price calculated by the Telecom Regulatory Authority of India (TRAI) for a 20-year period, according to a report.

This way, the reduction in the reserve price works out to be 36% as compared to what the regulator had recommended in 2018, the report said.

The development is significant as the Niti Aayog CEO Amitabh Kant is also a member of the Digital Communications Commission (DCC), the highest inter-ministerial decision-making body for the telecom sector, it added.
The government last September, as part of telecom reforms, had decided to give spectrum for a 30-year period.

But TRAI in its recent recommendations has said that if the spectrum is given for a 30-year period, then the price charged shall be 1.5 times of the 20-year period.

As per the report, the think tank believes that “there is no rationale behind a price for 20 years and then adding multiples to it”.

Notably, DCC has stuck to the regulator’s recommended base prices for 5G airwaves, while backing a telecom department panel view of auctioning airwaves for 20 years.

The DCC stance is a blow to telcos who were pushing for a steep cut in base price as well as a 30-year tenure for spectrum use. Operators have been clamouring for 5G base prices to be lowered by 90% against the around 39% on average reduction on the 2018 prices that the Trai recommended in April.
The government plans to auction over 1 lakh units of spectrum across 600 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3.3-3.67 GHz and 24.25-27.5 GHz bands, valued at around Rs 5 lakh-crore. The value is for spectrum given out for 20 years. The price for 30 years spectrum use would be 1.5 times the 20-year rates, the regulator has said.

On April 11, Trai had recommended a reserve price of Rs 317 crore a unit for airwaves in the premium 3.3-3.67 GHz 5G band (also known as C-band), a 36% reduction to its last recommendation in 2018. It had also cut the recommended price for the coveted 700 MHz spectrum by 40%, to Rs 3,297 crore a unit. On average, Trai cut prices across bands by around 39%.

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