5G spectrum auctions: Trai has no logic, best to ignore it

Not surprisingly, given its history of pushing for progressively higher spectrum prices, Trai has reiterated its high reserve price for the 5G spectrum that the government hopes to be able to auction this year. Based on the views of the Digital Communications Commission (DCC), the Department of Telecommunications (DoT) had asked Trai to relook its recommendations, since the government was keen to provide affordable 5G services to everyone and because, since there were just three private telecom players now, the demand was likely to be muted.

Given this is not the first time Trai has refused to budge from its recommendations—indeed, it just did the same in the case of the Rs 3,050 crore penalties on Airtel, Vodafone and Idea—the ball is in the DoT/DCC’s court, and it is to be hoped that they exercise it quickly. Thanks to Trai’s high reserve prices, in 2012, 67% of the spectrum on auction couldn’t be sold and this rose to 80% in 2013 and has averaged 38% since 2010. In FY17, while the government budgeted Rs 98,995 crore in telecom revenues, including auctions, it got just Rs 70,241