The Indian telecom operators recently made a request to the Department of Telecommunications (DoT) seeking a refund for the spectrum they intend to surrender. However, the DoT has turned down this request, stating that it is not feasible. This decision comes in the context of the upcoming spectrum auction scheduled for June 6, 2024. Prior to the auction, telecom firms sought clarifications on the Notice Inviting Application (NIA).
A DoT official clarified that telecom companies are not required to pay the entire spectrum amount upfront. Instead, they can cease paying Equated Monthly Installments (EMI) for frequencies they wish to surrender after a period of 10 years. According to current regulations, telecom operators can only surrender spectrum after holding it for 10 years from the acquisition date. The NIA for the 2024 spectrum auction mirrors that of the 2022 auctions, prompting telcos to request a change in this provision. They seek the option to receive refunds for surrendered spectrum, arguing that without this flexibility, they may hesitate to make upfront payments, whether in full or in part.
In the latest spectrum allocation, the cap for 5G airwaves has been raised. While some operators express concerns about this approach potentially facilitating spectrum hoarding, the DoT justifies the decision by pointing out that the increased cap accounts for the allocation of spectrum to BSNL (Bharat Sanchar Nigam Limited). Essentially, the spectrum assigned to BSNL has been factored in, allowing private telcos to bid for the remaining airwaves.
As the spectrum cap for 5G frequencies has been expanded, it remains to be seen whether major players like Airtel and Jio will seek to increase their holdings in these frequencies. This development adds an element of intrigue to the upcoming spectrum auction.
