DoT considers reverse auction model for spectrum sale

26 Nov 2018

India’s Department of Telecommunication (DoT) is considering a reverse auction model for the next spectrum sale, the Economic Times writes, citing a senior DoT official. The method has been proposed as a compromise between operators that want immediate access to additional frequencies and those that either want the spectrum auction to be postponed or the prices to be slashed. The process would also allow the government to raise funds from the spectrum whilst minimising the negative impact a tender might have on the industry, which is undergoing a period of extreme financial stress. Explaining the situation, an unnamed DoT official was quoted as saying: ‘The industry is divided; some operators want airwaves at current price, the rest want it either at a reduced price or don’t want an auction right now. Under the reverse auction model, one could put up all bands for auctions. The bandwidth which doesn’t elicit any response will automatically see a cut, say of 10% in the reserve price. This can once again be repeated till we hit a floor cap, say of 25% below the reserve price, after which we pull the particular bandwidth out of the auction and continue to sell the rest.’ Of the nation’s top providers, only Reliance Jio Infocomm (Jio) has expressed an interest in bidding for spectrum. Vodafone Idea would like the sale process delayed until 2020, and recently warned that it might default on an INR9 billion (USD127.6 million) spectrum payment due in March next year. Airtel, for its part, believes that the sale of 5G frequencies is premature, and is pushing for the state to lower the price on spectrum – particularly in the sub-1GHz bands.