Will Ravi Shankar Prasad listen to TRAI before 2016 spectrum auction?

TRAI Chairman RS Sharma
Telecom Regulatory Authority of India (TRAI) – headed by RS Sharma wants India’s telecom minister Ravi Shankar Prasad to release more spectrum for sales during the 2016 auction.

Since Ravi Shankar Prasad is not the decision maker to decide the quantum of spectrum available for auction, the BJP ruled government needs the support of finance minister and defense minister. But Ravi Shankar Prasad can take a lead in the decision process to support the Indian telecom industry this year.

If Ravi Shankar Prasad can assist Indian telecom businessmen Sunil Mittal, Kumar Mangalam Birla, Anil Ambani and Mukesh Ambani, the mobile sector can flourish.

TRAI wants the government to release entire available spectrum (2×35 MHz) in the 700 MHz band and the entire available spectrum in 2100 MHz band.

Telecom sector is not happy about the recommended reserve price of the spectrum.

Hemant Joshi, partner at Deloitte Haskins, says the ability of the mobile operators to pay for spectrum will be constrained as realized rate for voice and data are not growing.

The main concern among telecoms is the overstretched Balance Sheets. Bharti Airtel and Reliance Communications are in the process of slashing debt. “There is not adequate appetite for equity in the market,” Hemant Joshi said.

Hemant Joshi suggests that the timing of spectrum auction should be carefully considered so that all players can effectively participate.

He also noted that the price of 700 Mhz band is four times the reserve price of 1800 Mhz.

Telecom industry association COAI also said the pricing of 700 and 2,100 MHz is too high for mobile operators in India.

“The spectrum auction will help in removing the supply constraint. The prices of the 700 MHz and 2,100 MHz are high for the industry. We expect most of the activities in these two bands,” said Rajan S Mathews, director general, Cellular Operators’ Association of India.

The TRAI recommended reserve price of Rs 1,595 crore for 700 MHz and Rs 554 crore for 2100 MHz in the Delhi circle.

Rajan Mathews says the regulator has indicated that it will put 60 percent more spectrum in auction than the current holding across all the bands. At present, the total holding of spectrum across all the bands is between 2,700-3,000 MHz, IANS reported.

TRAI wants telecom stakeholders to complete the harmonization process in the 1,800 MHz band before upcoming auctions.

TRAI has also recommended that after network synchronisation of all the TDD networks, spectrum trading in 2,300 MHz or 2,500 MHz band should be permitted in the blocks of 10 MHz.

TRAI recommended that existing provision of a cap of 25 percent of the total spectrum assigned in 700, 800, 900, 1,800, 2,100, 2,300 and 2,500 MHz bands and 50 percent within a given band in each of the access service area shall apply for total spectrum holding by each TSP.

3G and 4G are the lifeline of the telecom industry to enhance their mobile data revenue. Since TRAI is set to start talking about 5G, the current spectrum auction is important for telecoms to grab additional airwaves to increase data revenue.

Baburajan K
[email protected]