Cabinet to take final call on spectrum reserve prices: Report

It is the Union Cabinet and not the Department of Telecommunications (DoT) that will take the final call on reserve prices for spectrum auctions, Financial Express reported. The report said that the telecom department maintained firmly that it will not reduce reserve prices.

As per sources cited by the publication, the telecom department has also prepared a draft Cabinet note, detailing the reserve prices for auctions, including 4G spectrum, as per the Telecom Regulatory Authority of India’s (Trai) recommendations.

The report added that Cabinet may decide on the reduction of reserve prices for two reasons–the first reason being the exact amount of AGR payments to be paid over the next 10 years is now known. Secondly, following the ban on Chinese telecom gear makers, the equipment procurement costs may go up by 15-20%.

Reliance Jio, Bharti Airtel, and Vodafone Idea (Vi) are split over the timing of 4G auction. While Reliance Jio is pushing hard for the bidding to take place at the earliest, Bharti Airtel and Vodafone Idea (Vi) are in no hurry and would like the sale process to take place in 2021, ET had reported.

Jio, the only profit-making operator whose parent Jio Platforms recently raised over Rs 1.52 lakh crore, has a large chunk of airwaves permits expiring in its key 800 MHz band in 2021 while the remaining two telcos–Airtel and Vi too have spectrum permits ending around the same time, but in lesser quantities and have backup airwaves available, as per industry experts.

“Some of them (telcos) feel that financial stability has to come first…another view is we need spectrum immediately,” said Kochhar, without specifying further, SP Kochhar, director-general for Cellular Operators Association of India (COAI) had said to ET.

The telecom department is preparing to sell airwaves in the 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz bands as part of the 4G auctions. The auction is expected to take place during January-March 2021 period.