Trai backs sale of all available spectrum; proposes lower entry barriers, 35% cap for new players

TRAI proposed halving the net-worth criteria for new entrants from Rs 100 crore to Rs 50 crore per licensed service area to encourage more participation.

New Delhi: The Telecom Regulatory Authority of India (Trai) on Tuesday recommended auctioning the entire available radiowave spectrum while proposing lower entry barriers for new players and a uniform 35 per cent spectrum cap to safeguard competition in the telecom sector.

While urging the Department of Telecommunications (DoT) to reclaim spectrum held by telecom companies undergoing insolvency, Trai proposed halving the net-worth criteria for new entrants from Rs 100 crore to Rs 50 crore per licensed service area (and from Rs 50 crore to Rs 25 crore for Jammu and Kashmir and the northeast) to encourage more participation.

All available spectrum, across nine frequency bands, should be put to auction in the forthcoming bidding, the telecom regulator recommended.

While the reserve or base price is lower than 2022 auctions for most LSA (Licensed Shared Access) and band combinations, in a few cases, it is higher than the previous sale.

In its recommendation that spans the modalities for spectrum auctions, such as applicable reserve price, band plan, block size, and associated conditions for spectrum bids, Trai said DoT should immediately reclaim spectrum held by providers undergoing insolvency and include those airwaves in the upcoming auction.

The spectrum, in the frequency bands identified for IMT, should be auctioned on Telecom Circle/ Metro Area basis with a validity period of 20 years. For participation in the forthcoming spectrum auction, the eligibility conditions, as prescribed in Notice Inviting Application 2024 or the 2024 bid document, should be continued for all frequency bands, according to the regulator.

A uniform spectrum cap of 35 per cent has been recommended across low, mid and high-frequency bands - including 600 MHz, sub-1 GHz bands, 1800-2500 MHz bands, 3300 MHz, 26 GHz and 37-40 GHz - with no requirement for operators already exceeding the cap to surrender existing holdings.

"The entire available spectrum in the 600 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300 MHz and 26 GHz frequency bands should be put to auction in the forthcoming auction," Trai said.

The rollout obligations for the existing frequency bands, that is, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2SOO MHz, 3300 MHz, and 26 GHz bands, should be the same as those prescribed for respective frequency bands in the Notice Inviting Applications (NIA) 2024.

To incentivise the 600 MHz band, the regulator has suggested a longer validity of 24 years (instead of 20), a four-year moratorium on payments, and a four-year delay in rollout obligations.

"While the spectrum charge may be levied for a period of 20 years, the validity period of the spectrum should be increased by four years, that is, the usual 20 years plus 4 years," it suggested.

The rollout obligations for the spectrum in the 600 MHz band should be the same as those applicable to other sub-1 GHz bands. However, it should be delayed by four years; that is, no rollout obligations for the initial four years, and the applicable rollout obligations should begin thereafter.

In addition to the upfront payment option, an additional payment option should be made available for the spectrum in the 600 MHz band, it said, outlining the payment plan with a moratorium.

The upper 6 GHz band (6425-7125 MHz) is to be reserved for IMT (mobile services), but will not be auctioned yet; instead, it will undergo technical trials to ensure no interference with satellite stations.

"The available frequency ranges in the 6 GHz (upper) band, viz. 6425-6725 MHz and 7025-7125 MHz should not be put to auction in the forthcoming auction. The issue of auctioning the spectrum in the 6 GHz (upper) band should be reexamined after considering the outcome of WRC-27," Trai said.

The regulator said the telecom department may carry out a plan (involving all TSPs) to conduct trials around all 34 locations where satellite uplink stations are located in the relevant frequencies (in-band and adjacent frequencies) to determine the requirement of the keepout distance of IMT base stations from satellite uplink stations.

"The outcome of the trials may also be shared with Trai," the regulator said.

To bridge the digital divide, the regulator has proposed a novel "coverage-for-discount" kind of scheme that allows successful bidders to offset up to 10 per cent of their spectrum auction costs by expanding service into "dead zones".

Under this plan, telecom operators can opt for a price reduction in exchange for deploying new 4G or 5G base stations in government-identified "coverage holes" within one year.

To ensure these remote areas benefit from maximum connectivity, Trai has mandated that any towers built under this incentive must be shared with competing telcos at a fair price, ensuring that residents in previously unserved regions gain access to multiple network providers.

Outlining measures to strengthen competition, Trai proposed reconsideration of a separate wholesale Access Network Provider authorisation, expedited introduction of new infrastructure-related licences, and setting aside certain TDD (Time Division Duplex) spectrum for ISPs, M2M providers and captive networks.

A fresh valuation exercise for spectrum has been proposed every three years, with indexed auction-determined prices to guide interim auctions.

The recommendations pave the way for the next major spectrum sale, critical for expanding 5G networks and deepening digital connectivity across India.