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India's 4G spectrum auction likely to be delayed again

Currently scheduled for October, India's 4G spectrum auction looks to be heading for another postponement until the first quarter of next year.

Telecom authorities have yet to come up with a cabinet note, which would approve the base price for spectrum and the quantity to be sold.

This note is required before authorities can send out a Notice Inviting Applications (NIA). Typically, it takes around 45 days from the issuance of NIA until a spectrum auction begins.

Originally scheduled for earlier this year, the auction was postponed to October because of the outbreak of the COVID-19 pandemic.

It is supposed to include spectrum in the 700MHz, 800MHz, 900MHz, 1800MHz, 2100MHz, 2300MHz and 2500MHz bands.

An auction of 5G spectrum in the 3300-3600MHz band has already been postponed until 2021 after service providers complained they would not be able to afford spectrum fees, especially at the high reserve prices set by the regulator.

Operators have amassed debts in the fiercely competitive Indian market and have already been hit by the government with a demand for license payments under the country's Adjusted Gross Revenue system.

Yet Jio, the largest mobile operator, wants the auction to be held at the earliest.

It has recently benefited from a funding injection of more than $20 billion, attracting investment from companies including Google, Microsoft, Silver Lake and Facebook.

Jio is also the only service provider that is adding subscribers, and so it urgently needs more spectrum.

"We are unable to find any reasonable rationale behind this sudden pause in a successful and fruitful policy of auctioning all available spectrum every year," says the letter Jio sent to the Department of Telecommunications (DoT).


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Jio also highlighted that spectrum worth more than $50 billion is lying unused with the DoT.

In contrast, Vodafone Idea and Bharti Airtel, which have racked up significant AGR debts and are struggling to maintain profitability, are in no hurry for an auction.

Nevertheless, spectrum licenses held by all three operators are due to expire in 2021, and they will need to renew those if they are to continue to provide services.

One question is whether the government will now decide to run the 4G and 5G auctions together.

The chances are still high that a 4G auction will be held before the end of the current fiscal year in March 2021 – India's economy is struggling and the COVID-19 pandemic is adding to the stress.

Authorities stand to earn as much as 5.23 trillion Indian rupees ($70.9 billion) from the auction of 4G and 5G spectrum.

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— Gagandeep Kaur, contributing editor, special to Light Reading

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