India is set to defer 4G spectrum auctions to the first quarter of 2021 despite an aggressive push from Reliance Jio for an urgent sale as the Mukesh Ambani-led 4G telco requires to renew spectrum license to continue operations in various circles.
According to the Department of Telecommunications (DoT) officials, the auction can’t take place within 2020 due to various “administrative” issues. “…the sale can’t be done in such a hurry, and there are procedures involved, which need to be followed,” an official told the Economic Times.
India’s telecom department hasn’t floated a Cabinet note on the spectrum auction. Without this document, and the approval from the Cabinet on spectrum pricing and quantum, the DoT can’t go ahead with the auction process.
As part of the process, DoT will need to issue the Notice Inviting Applications (NIA) after getting the Cabinet approval. It typically takes 45 days from the issue of the NIA to hold the spectrum auction.
India was previously planning to hold the auction in October but the lockdown in earlier this year and uncertainty over the 5G spectrum delayed the whole process.
The DoT is planning to put up spectrum in the 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz bands.
India has already deferred 5G spectrum auction to sometime in 2021 due to the financial health of Vodafone Idea and Bharti Airtel, and an underdeveloped local ecosystem around the 5G technology. India has earmarked spectrum in the 3,300-3,600 MHz band or the mid-band for the next-generation 5G service.
India’s leading telecom operator, Reliance Jio, had last week written to the Prime Minister office (PMO) and the DoT to conduct spectrum auctions at the earliest. It said that any delay would hurt the investor’s confidence and lead to losses to the government.
“We are unable to find any reasonable rationale behind this sudden pause in a successful and fruitful policy of auctioning all available spectrum every year, since the Hon’ble Supreme Court decision in 2012,” Reliance Jio said in the letter to the DoT secretary.
Jio also said that unutilised spectrum will lead to serious issues around quality of services in terms of call drops.
Jio’s rivals Airtel and Vodafone Idea have reportedly told the government that there was no immediate need for an auction citing their financial health. Both telcos are financially weaker and have been impacted by the adjusted gross revenue (AGR) litigation.
All three telecom operators have some spectrum licenses expiring in mid-2021, and will need to repurchase the spectrum to continue operators.
Jio, in its letter, alleged that rival telcos are opposing spectrum auction to “stifle competition”, adding that they have amassed a large amount of spectrum, through mergers and acquisitions.
The Indian government could get around Rs 25,000 crore ($3.42 billion) upfront if Jio the sale was to happen within the 2020 calendar year, Jio said in its letter, adding that spectrum worth Rs 3.92 lakh crore ($53.7 billion) is lying unused with the DoT for auction.
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