5G Spectrum Auction-TRAI
Context: Telecom Regulatory Authority of India (TRAI) has released recommendations on the release of the spectrum. Telecom companies are upset with the regulator despite its proposal to cut prices by 40%
Key recommendations by TRAI
The telecom regulator has recommended that all the available bands like 700MHZ, 800MHZ, 900MHZ, 1800MHZ, 2100MHZ, 2300MHZ, and 2500MHZ should be put up for auction
Along with existing bands, TRAI recommended new bands like 600MHZ, 3300-3670MHZ and 24.25 -28.5 also be put for an auction
More than 1,00,000 MHZ of airwaves have been recommended to be put up for auction.
The total spectrum on offer at the price of 5lakh crore for 20 years
3300-3670MHZ has emerged as the prime spectrum for 5G deployment in India.
Key changes
- The all India reserve price has been lowered by about35.5% - 317crores/MHZ from 492Crores/MHZ recommended earlier
- The reserve price of the premium 700MHZ band, nobody auctioned for it earlier. so its price has been cut by 40% to 3,927crore/MHZ from 6,568 crore/MHZ
TRAI has determined the reserve price for the spectrum band for 20 year holding period
TRAI has also recommended several options for the uptake of Captive wireless Private Networks(CWPN), including private networks through telcos, independent isolated networks in enterprises' premises using telcos spectrum, allowing enterprises to take spectrum on lease from telcos or directly from the department of Telcom (DoT) to establish their own isolated captive private networks
TRAI said enterprises may obtain the spectrum directly from the government and establish their CWPN
Why price has been cut?
- Due to the financial stress in the sector, the government has written to the regulator to maintain a balance between generating revenue and sustainability of the telecom sector
- In the last spectrum auction, which was held in March 2021, only 37% of the spectrum was acquired by the telecom providers, largely due to high prices
- It also highlighted that spectrum lying idle is a waste of the economy
Why are telecom companies still unhappy?
Cellular Operators Association of India (COAI) called the recommendation, a "step backwards" than forward towards building a digitally connected India.
The industry has recommended a 90% reduction in prices but only been a 30-40% cut which is disappointing to them
They said charging 1.5x price for spectrum for 30 years will nullify the relief provided by the Union Cabinet in 2021
About TRAI
Telecom Regulatory Authority of India was established on 20th February 1997 with the Telecom Regulatory Authority of India Act
It was set up to have a suitable environment for the growth of the telecom industry in the country and be a part of the worlds information society
Objective
TRAI will regulate services including fixation/revision of tariffs of telecom services. which were vested with Central Government before
It is promised to provide a fair and transparent policy environment that promotes level playing fields and healthy competition
Structure:
- TRAI consists of five people- two permanent members, two part-time members along with a chairperson. all are appointed by the Central Government
- Chairman and other members will have three years of tenure or till 65 years of age whichever comes earlier
- Members, the chairperson can be removed by the Central Government on various grounds
- Recommendations of TRAI are not binding on the Central Government of India
Telecom Dispute Settlement and Appellate Tribunal(TDSAT)
TRAI Act, 1997 was amended in 2000 to establish Telecom Dispute Settlement and Appellate Tribunal to address the disputes in TRAI
Functions:
It will address the disputes of the following
- Service providers and consumers
- Two or more service providers
- Licensor and licensee
- It will hear appeals against any direction, decision or order of TRAI
Selection of the members is done by the Central Government of India in consultation with the Chief Justice of India (CJI)
