COAI asks government to reduce 5G spectrum base price by more than half

Telecom industry body COAI is learnt to have asked the government to cut the base price of spectrum by more than half, for the proposed auction especially for 5G services, according to industry sources.

In the first auction of radio airwaves in five years in March 2021, the government offered 2,308.80 MHz of spectrum in seven bands, at a reserve price of nearly Rs 4 lakh crore.

However, airwaves in the premium 700 MHz and 2,500 MHz bands went unsold mainly due to high base price.

The government could not put 3.3-3.6 Ghz frequency range for auction as it could not get it vacated in time and the base price of the radio waves in the spectrum band was termed to be very expensive for 5G services.

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"COAI has asked the government for a drastic cut in spectrum price for the proliferation of digital connectivity and specially for ushering 5G services. It has requested the government to reduce the base price by more than half in the proposed spectrum auction," a telecom operator representative told PTI.

The proposed spectrum auction is likely to be held in the April-June quarter of 2022.

The Cellular Operators Association of India (COAI) declined to comment on the matter.

Representatives of two separate telecom operators quoted different figures on the scale of reduction demanded by the industry body, but concurred on the view that the COAI has sought to slash spectrum price by more than half.

One representative said it is to the tune of 50-60 per cent and the other senior official of another telecom operator mentioned 60-70 per cent.

The Telecom Regulatory Authority of India (Trai) had recommended a base price fixed at Rs 492 crore per megahertz for spectrum in 3.3-3.6 Ghz.

Telecom operators interested in buying radio waves for 5G will have to shell out a minimum of Rs 9,840 crore on pan-India basis to buy spectrum in 3,300-3,600 Mhz band as Trai has suggested that it "should be put to auction in the block size of 20 MHz".

In May, the government allocated spectrum to the telecom companies for trials across various locations for six months in the 700 Mhz band, 3.3-3.6 Gigahertz (Ghz) band and 24.25-28.5 Ghz band.

At present 5G trials are going on in the country. The Department of Telecom has extended the trial period to May 2022, or till the time spectrum auction results are out, whichever is earlier.

Vodafone Idea has demonstrated the highest download speed of around 4 gigabit per second during the trials.

Telecom gear maker Nokia India had claimed to have recorded a top speed of 9.85 gigabits per second on VIL network in back-end data transmission, which means connecting mobile base stations network, during 5G trials in Gandhinagar, Gujarat.

VIL has been running 5G trials in Gandhinagar with Nokia and in Pune with Ericsson.