TRAI Paper on Telecom Spectrum Auction 800,900,1800MHz Addresses few Issues but InComplete

TRAIThe Indian Telecom Regulator, TRAI has issued a consulting paper on the Auctioning of 800,900 and 1800MHz Telecom Spectrum. After a Thorough study of the same over the weekend we think that it addresses few issues but is not able to foresee things beyond and we raise few question on the same.

What does the TRAI Paper Address ?

  • In our view, the consultation paper revealed the regulator’s clear bias towards a reduction in the spectrum reserve price to be in line with the industry’s poor financial health.
  • Revisiting legacy issues such as escalating SUC, rollout obligations and feasibility of spectrum trading
  • Acknowledgment of the presence of too many telcos and the need for the consolidation.

What the TRAI paper does not Address ?

  • In our view, the regulator is not engaging in a discussion about whether or not the refarming of the 900MHz band should happen. It has asked for suggestions for the methodology to be adopted for the refarming of the 900MHz band so that adequate spectrum could be kept aside in the 900/ 1800MHz band before upcoming spectrum auction.
  • If in an 1800 auction, no distinction is made between 4G capable blocks and other smaller strips, true price discovery cannot happen. If priced differently, the auction would be complex and could provoke the trigger CAG and public into adverse reactions.
  • TRAI does not comprehensively outline how escalating SUC will kill incumbents’ appetite for additional spectrum. In our view, the key factor would be a decision by the Department of Telecom (DOT) rather than TRAI’s recommendations on the subject.
  • While TRAI asks whether only cancelled spectrum or all available spectrum needs to be auctioned, it also includes spectrum currently held by defence. The ministry of defence has raised objection to DoT regarding this
  • Silent on Spectrum Sharing by Operators

Let us hope that their will be transparency in dealings this time around and the telecom eco-system moves forward ignoring corrupt political masters.

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