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Telcos hopeful of reduction in spectrum base price: COAI

PTI     October 13, 2020

Telecom operators are still hopeful of reduction in base price of spectrum for the next auction round even though the Digital Communications Commission (DCC) has cleared cumulative floor price of Rs 5.22 lakh crore for the airwaves to be sold, industry body COAI has said. The Cellular Operators Association of India (COAI) -- whose members include Reliance Jio, Bharti Airtel, Vodafone Idea, etc -- is doing regular follow-up on promises made by the government in National Digital Communications Policy (NDCP), 2018, COAI Director General S P Kochhar told PTI.

Industry players have been requesting the government to reduce levies and fees as promised under the policy two years back and also rationalise spectrum prices. The DCC, the apex decision making body of the Department of Telecom (DoT), in May had approved the spectrum auction plan subject to the Union Cabinet approval. The DoT, however, is yet to come up with any notification for the next round of auction in which airwaves worth Rs 5.22 lakh crore are to be sold.

"A lot of water has flown since then (DCC meeting). A lot of logical representation, arguments have been submitted to the government. Government has not said that we reject your argument. The government has not come out with any notice of the price," Kochhar said.

He said in response to a query with regard to industry position on spectrum auction as the DCC has not heeded to request of telcos on reducing price. The DoT has to approach the Cabinet to seek approval for spectrum auction but the latest move of the department could not be ascertained.

Telecom major Reliance Jio has questioned the DoT's rationale to pause the policy of annual spectrum auction and demanded that the sale of airwaves should be held at the earliest to meet the demand for data services in the country. Mukesh Ambani-led Jio in a letter dated September 28 to Telecom Secretary Anshu Prakash said that any delay in auction of unutilised spectrum will lead to serious issues around quality of mobile services in terms of call drops etc and also result in "revenue loss to the government".

According to Jio, spectrum worth Rs 3.92 lakh crore is lying unused with the DoT for auction. Other players like Bharti Airtel and Vodafone Idea have divergent views on timing of the spectrum auction. Kochhar said companies will take decisions on participation in auction based on their requirements and differences will continue on some issues.

"At the same time telecom operators are on the same page over strategic issues. We have written to the DoT that E and V band spectrum should be auctioned and not allocated," he said. The COAI DG said that the industry is waiting to hear from the DoT on the definition of adjusted gross revenue (AGR) which is must for the sustainability of the sector.

The Telecom Regulatory Authority of India (Trai) has given its recommendation on AGR in 2015 based on which the government should collect its share of revenue from the service providers but the DoT is yet to take any decision on the same. "As far as operators are concerned, they are in favour of Trai recommendations getting accepted. Whether it gets transformed into policy, we will have to wait and watch," Kochhar said.

He added that the industry body is regularly doing follow-up with the government on the execution of NDCP 2018 which is expected to reduce stress on the sector and enhance investments. "We keep doing follow-up regularly. NDCP has said telecom should be recognised as an essential service. Once they recognise this as an essential service then a lot of things will fall in place automatically," Kochhar said.

The NDCP 2018 was approved by the Cabinet in September 2018 with most of the targets to be completed by the year 2022. The DoT is yet to finalise guidelines for implementing the policy promises like declaring telecom as critical and essential infrastructure that will enable low-cost financing for the sector, reviewing and rationalisation of licence fees and levies on telecom operators and equipment etc.

Also read: Reliance Jio, Airtel add over 30 lakh subscribers in June; Vodafone Idea loses 37 lakh users


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