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The Department of Telecom (DoT) is in favour of a 20-year validity for spectrum to be auctioned off in the approaching auctions, as per various sources.
According to PTI's sources, the DoT is recommending TRAI-recommended reserve prices to the Cabinet, which will ultimately decide on these critical 5G spectrum auction concerns. The sources added that the DoT is not in favour of a rapid administrative distribution of spectrum for private 5G networks in this round, citing the thorny issue of captive networks, which has seen telcos and tech players mired in a war.
They highlighted that TRAI , the sector regulator, had stated that extensive studies( to determine demand and market) for captive network will be conducted. According to insiders, conducting such investigations would take more time.
According to PTI sources, The TRAI has also made no recommendations on procedures or rates for any such administrative allocation. The cabinet will make the final decision on all of these issues, they added.
The telecom department is in favour of a 20-year validity for spectrum put up for auction, because the regulator, TRAI had worked out its reserve price calculations on a 20-year basis, according to PTI report.
The Telecom Regulatory Authority of India indicated in its 5G suggestions in April that the reserve price of spectrum allocation for 30 years must be 1.5 times the reserve price of spectrum allocation for 20 years for the respective band.
According to PTI souces, while TRAI has proposed a '1.5 times' formula to compute the base price for 30 years of validity, this might increase interest outgo and installments for players, contradicting the spirit of the reforms, which aimed to lessen the burden on telecom firms.
The mega auction was originally scheduled for June, but due to the Cabinet's failure to accept the 5G spectrum auction's modalities, that date is now likely to be pushed back. According to PTI insiders, the Department of Telecom is optimistic that the topic will be taken up for discussion next week.