Lok Sabha Question No. 1508 (UNSTARRED), answered on 2019-11-27
Subject: Spectrum Auction
Ministry: COMMUNICATIONS
Asked by: Kotha Prabhakar  Reddy

## GOVERNMENT OF INDIA MINISTRY OF COMMUNICATIONS DEPARTMENT OF TELECOMMUNICATIONS

## LOK  SABHA UNSTARRED QUESTION NO. 1508 TO BE ANSWERED ON 27 TH   NOVEMBER, 2019

## SPECTRUM AUCTION

## 1508. SHRI KOTHA PRABHAKAR REDDY:

Will the Minister of COMMUNICATIONS be pleased to state:

- (a) whether the Telecom Regulatory Authority of India (TRAI) has recommended auction of 700 MHz spectrum for the first time in the country at a pan-India reserve price of about Rs.11,500 crore per MHz and this is considered to be the most suitable for offering high speed broadband services and if so, the details thereof;
- (b) whether the telecom operators have asked for the spectrum sale to be held back till the device ecosystem is put in place and if so, the details and the present status thereof along with the reaction of the Government thereto;
- (c) whether the 700 MHz band, which has been priced four times than that of 1800 MHz band, is considered important for the telecom industry which is looking to capitalise on the growing demand of data services and if so, the details thereof;
- (d) whether scarcity of spectrum has been cited by telecom operators as one of the main reasons for call drops and poor data speeds and whether the auctions will put further pressure on the debtladen telecom industry and if so, the details thereof and the reaction of the Government thereto;
- (e) whether the ability of telecom operators to pay for spectrum will be constrained as realized rate  for  voice  and  data  are  declining  for  last  few  quarters  and  the  balance  sheets  are  already overstretched and there is not adequate appetite for equity in the market and if so, the details thereof and the reaction of the Government thereto; and
- (f) whether the TRAI has mooted removing band-wise spectrum limit in its draft paper or sticks to the existing rules, if so, the details thereof?

## ANSWER

## MINISTER OF COMMUNICATIONS, LAW & JUSTICE AND ELECTRONICS AND INFORMATION TECHNOLOGY (SHRI RAVI SHANKAR PRASAD)

- (a) A total of 1540 MHz of spectrum in 700 MHz band was put to auction for the first time during October 2016 at a reserve price of Rs.11,500 crore per MHz. However, there were no bidders for this spectrum.  The  same  quantum  of  spectrum  in  700  MHz  band  has  again  been  recommended  by Telecom Regulatory Authority of India(TRAI) for next auction to be held in 2020. The reserve price recommended by TRAI is at Annexure.

(b) Telecom operators have  not asked the Government to hold back auctions. However, during the  TRAI  open  house  consultations,  while  most  stakeholders  were  of  the  view  that,  whenever auctions are held, entire available spectrum should be put to auction. A few stakeholders submitted that the ecosystem in 700 MHz and 3400-3600 MHz has still not developed. So even if auction is to take  place,  these  bands  should  not  be  auctioned  before  2020.  One of  these  stakeholders  had  added that there was no need to auction 3300 to 3600 MHz when 700 MHz band is still unutilized.

(c) In the TRAI recommendations, the price of the spectrum in 700 MHz is generally higher than 1800 MHz but it is not as high as four times and it varies from LSA to LSA (Licensed Service Area). The  TRAI recommended price of 700 MHz and 1800 MHz band dated 01.08.2018 is enclosed at Annexure.

The  700  MHz  band  spectrum  is  suitable  for  coverage  requirements.  It  may  not  best  suited spectrum for Data services.

(d) No  such  representation  citing  the  shortage  of  spectrum  (and  leading  to  call  drop/poor  data speed) has been received by the Government.

The  auction  rules  allow  the  existing  as  well  as  new  operators  to  participate  in  the  auctions.  The operators may decide to abstain or participate in the auction as per their business plan and ability.

(e) Yes, Sir. However, few Telecom Service Providers (TSPs) have recently decided to increase the tariffs for voice and data. The Government also has recently decided to give relief to financially stressed TSPs by permitting deferment of spectrum auction payment installments for next two years (2020-21 and 2021-22).

(f) As  on  date,  there  is  no  band-wise  spectrum  cap.  In  the  present  recommendations  of  TRAI dated 01.08.2018, TRAI has recommended that in 3300-3600 MHz band, there should be a spectrum holding cap of 100 MHz per licensee.

The Authority has recommended that the revised provisions of spectrum cap (i.e. 35% Overall cap  and  a  Cap  of  50%  on  the  combined  spectrum  holding  in  the  sub-1  GHz  bands)  should  be extended  to  3300-3600  MHz  band  also.  Additionally,  in  3300-3600  MHz  band,  there  should  be  a spectrum holding cap of 100 MHz per licensee.

## ANNEXURE

## RECOMMENDED RESERVE PRICE PER MHz (PAIRED) IN 700 MHz AND 1800 MHz BAND

(Rs.    in crores)

| (1)              | (2)                                                 | (3)                                                  |
|------------------|-----------------------------------------------------|------------------------------------------------------|
| LSA              | Recommended Reserve Price (Rounded off) for 700 MHz | Recommended Reserve Price (Rounded off) for 1800 MHz |
| Delhi            | 915                                                 | 457                                                  |
| Mumbai           | 1122                                                | 561                                                  |
| Kolkata          | 347                                                 | 173                                                  |
| Andhra Pradesh   | 557                                                 | 279                                                  |
| Gujarat          | 546                                                 | 273                                                  |
| Karnataka        | 219                                                 | 109                                                  |
| Maharashtra      | 729                                                 | 365                                                  |
| Tamil Nadu       | 199                                                 | 100                                                  |
| Haryana          | 113                                                 | 57                                                   |
| Kerala           | 190                                                 | 95                                                   |
| Madhya Pradesh   | 190                                                 | 95                                                   |
| Punjab           | 177                                                 | 88                                                   |
| Rajasthan        | 211                                                 | 105                                                  |
| U.P. (East)      | 305                                                 | 153                                                  |
| U.P. (West)      | 230                                                 | 115                                                  |
| West Bengal      | 105                                                 | 53                                                   |
| Assam            | 92                                                  | 46                                                   |
| Bihar            | 175                                                 | 88                                                   |
| Himachal Pradesh | 37                                                  | 18                                                   |
| Jammu &Kashmir   | 30                                                  | 15                                                   |
| North East       | 25                                                  | 13                                                   |
| Orissa           | 54                                                  | 27                                                   |

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