India's Telecom Regulatory Authority of India (TRAI) has recommended a steep cut of 43 percent in the minimum prices for 700 MHz spectrum to be auctioned in the near future. That recommendation comes after no bidders emerged for such spectrum in 2016.
The recommendation, if approved, will lead to auctions representing as much as 8.3 GHz of new spectrum, including capacity at 700 MHz, 800 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz, 2,500 MHz and 3,300-3,600 MHz.
If the recommendations are accepted, mobile operators will face starting prices as much as 33 percent of the level set for 2G (1800 MHz) frequencies in 2012. But some believe minimum prices might have be adjusted lower again.
Spectrum prices in India in the past have been quite high by global standards. That has lead the Indian government to propose lower starting prices for spectrum to be auctioned in support of 4G and 5G operations in India. When the government attempted to auction 700-MHz spectrum in 2016, there were no bidders and the auction was cancelled.
Spectrum prices that were deemed way too high are the reason. The government’s minimum prices would have cost the mobile industry bidders a sum more than twice total annual industry revenues, and a minimum of 22 years worth of free cash flow, analysts at Coleago have noted.
And that is based strictly on the release of all spectrum at the minimum reserve price. Past auction prices moved far beyond the minimum prices.
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