TRAI reduces prime 5G spectrum base price by over 35%

The base price for coveted 700 Mhz band works out to be Rs 3,927 crore per Mhz, which is 40 per cent lower than that proposed last time

In a bid to attract aggressive bidding by telecom operators, the Telecom Regulatory Authority of India (TRAI) on Monday reduced the base price of 5G spectrum.

The telecom regulator has cut the price of the 700 MHz band by 40 per cent, while also lowering the price of the 3300-3670 MHz band by 36 per cent.

The regulator in its recommendation to the government said that all available airwaves in existing bands -- 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz -- and those in new bands -- 600 MHz, 3300-3670 MHz and 24.25-28.5 GHz -- be auctioned in the upcoming 5G spectrum sale.

Also Read: High 5G spectrum prices may push players up against the wall, says telecom industry body COAI

The government had been pushing TRAI to send its pricing recommendations by March end itself, so that it can hold the much awaited 5G spectrum sale in May. The next generation 5G will usher in ultra high-speed and spawn new-age services and business models. The Department of Telecom aims for initial 5G rollouts by August 15.

"To provide flexibility to the telecom service providers, block size of 10 MHz for 3300-3670 MHz band and 50 MHz for 24.25-28.5 GHz band recommended. Spectrum to be assigned in a contiguous manner," TRAI said in a statement.

For the prime 5G frequency of 3300-3670 MHz band, all-India reserve price adds up to Rs 317 crore per MHz, which is over 35 per cent lower than the Rs 492 crore/MHz suggested by TRAI last time. The base price for the coveted 700 Mhz band works out to be Rs 3,927 crore per Mhz, which is 40 per cent lower than that proposed last time.

In all, the reserve price across various bands turned out to be nearly 39 per cent lower than what was suggested last time, sources in the government said. .

For the long-term growth and sustainability of the telecom sector, infusing liquidity and encouraging investment, the telecom service providers should be allowed easy payment options, including part payment with flexibility of moratorium, the TRAI said.

"The reserve price of spectrum allocation in the case of 30 years should be equal to 1.5 times the reserve price of spectrum allocation for 20 years for the respective band. ," TRAI said in its recommendations.

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