Trai may begin consultations on next round of spectrum auctions in September
origin : ET Telecom
Date : 2017-07-17
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NEW DELHI: The Telecom Regulatory Authority of India may begin consultations on next round of spectrum auctions in September, although it's unlikely the government will sell airwaves in this financial year, given high level of debt and competition in the industry. Consultations could stretch out to late this year or early next, rendering any sale in FY18 a remote possibility, going by the time taken for previous auctions. "By September, the consultation paper on auctions should be out," a Trai official said, asking not to be identified. "When the auctions can be held is for the telecom department to decide." Trai chairman RS Sharma told ET in May that he planned to submit recommendations to the Department of Telecom by December and although there was financial stress in the sector, the consultation process would be carried out and completed. Trai officials said its suggestions could include the schedule for the next spectrum sale. The previous spectrum auction took place about 10 months after Trai gave its first set of recommendations on base prices in January 2016. Final recommendations were in April and approved by the Telecom Commission in the same month. The notice inviting applications, the formal document that lays down the auction timeline, came out in August and the sale started in October that year. DoT had asked Trai in April to recommend reserve prices in a range of 4G bands and for spectrum for 5G services, which could be making their debut. However, the telecom industry wants the auction only in late 2018. Analysts said there is no appetite for fresh spectrum as telecom companies, burdened with debt estimated by banks at Rs 7.29 lakh crore, are in the midst of a rate war and are in no financial position to bid for expensive airwaves. Banks also fear defaults by telcos. Reliance Communications has already been forced into debt restructuring. The government has set up an inter-ministerial group to look at ways of easing the financial stress in the sector and the panel's report is expected this month. DoT, too, has told the finance ministry that it does not expect telcos to bid for airwaves this year and has asked it to lower its revenue expectations from the sector by 37% to about Rs 29,500 crore for this financial year. All major telcos, including market leader Bharti Airtel, Reliance Jio Infocomm, Vodafone India and Idea Cellular, bought up the airwaves they needed at the October sale. The response to the 2016 auction was muted because of high spectrum costs.