'Enough' spectrum to begin rolling out of 5G services in India, says Prasad

Telecom Minister Ravi Shankar Prasad on Wednesday said there was ‘enough’ spectrum available to start 5G services, putting to rest the claims by the industry that the airwaves were not sufficient for rolling out these next generation services.

Replying to a question in the Lok Sabha, Prasad said, “The value of unsold spectrum as on date according to valuation by the Trai in its recommendations on auction of spectrum in 700 MHz, 800MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300-3400 MHz, 3400-3600MHz bands dated 01.08.2018 is Rs 4.9 lakh crores.”

Spectrum available for 5G auction is — 3300 to 3400 MHz and 3425 to 3600 MHz. In other developed countries, spectrum likely to be used for 5G services is — 3300 to 3400 MHz, 3400 to 3600 MHz, 3600 to 3700 MHz, and 4800 to 4990 MHz.

Broadband India Forum, in their representation to the government, has said the quantum of 5G spectrum that has been allocated for the upcoming 5G spectrum auction is not enough for a country of India’s size and density.

“In DoT’s view, the present available spectrum is enough to start the 5G services,” the minister said.

Besides the quantum, the three telecos — Bharti Airtel, Vodafone Idea, and Reliance Jio, have time and again said base price for the 5G spectrum was very high. They had even expressed their reservation in participating in the proposed auctions.

The Trai had recommended a pan-Indian base price of Rs 492 crore per MHz for 5G radiowaves while lowering the base price of frequencies that remained unsold in the 2016 auctions. Airwaves in the 3,300-3,600 MHz 5G band will be auctioned in the block size of 20 MHz.

The reserve price for the premium 700 MHz spectrum, which went unsold in the 2016 auctions, was reduced by more than 40 per cent to Rs 6,568 crore per MHz all-India from Rs 11,485 crore in 2016.

The Trai recommended a base price of Rs 4,651 crore for paired spectrum in the 800 MHz band covering 19 circles, Rs 1,622 crore per MHz for the 900 MHz band covering seven circles, Rs 3,399 crore per MHz in the 2,100 MHz band covering 21 circles, and Rs 821 crore per MHz in the 2,500 MHz band covering 12 circles. It also suggested Rs 960 crore per MHz for unpaired spectrum in the 2,300 MHz band on a pan-Indian basis.

BSNL, MTNL vendors mull insolvency action against telcos over pending dues

Some vendors of BSNL and MTNL are mulling to move insolvency pleas against the state-run firms for non-payment of dues, estimated to be around Rs 20,000 crore, a senior industry body executive said on Monday.

The pending payments are against the supply of telecom gear and other goods to BSNL and MTNL as well as Rs 45,000-crore rural broadband project BharatNet, PHD Chamber of Commerce Telecom Committee chairman Sandeep Aggarwal told PTI.

"The total pending payment of BSNL and MTNL vendors is around Rs 20,000 crore. Banks have started putting pressure on vendors to clear their dues. All vendors will jointly stage a protest on November 19. If payments are not made within 10 days thereafter, they will approach NCLT for liquidation of BSNL and MTNL," Aggarwal claimed.

Email queries sent to BSNL and MTNL over the pending dues of vendors remained unanswered till the filing of the story.

The Telecom Export Promotion Council on October 31, 2019, wrote to the administrator of Universal Service Obligation Fund (USOF) to pay long-pending dues of around Rs 2,000 crore to various vendors. USOF manages the BharatNet project.

These vendors include Sterlite Technologies (Rs 500 crore due), Tejas Networks (Rs 314 crore), HFCL (Rs 219 crore), Paramount Wires and Cables (Rs 168 crore), VNL (Rs 150 crore) etc, according to the letter. In a letter to telecom minister Ravi Shankar Prasad, Paramount said its bankers are pressuring the company to clear their dues at the earliest.

"Our plant has remained mostly shut, since we do not have funds to buy raw materials. Creditors are refusing to supply even at high prices. Our staff and worker salaries have not been paid for the last two months. This has never happened in our history," Paramount said.

Last month, the Cabinet approved a Rs 69,000-crore revival plan for BSNL and MTNL but dues of many vendors are still unpaid. Aggarwal said that around 1 lakh direct employment are affected due to non-payment of dues by government-run firms.

"With Rs 20,000 crore payment due, around 1 crore manhours salary has not been paid," he said.

AGR verdict: COAI seeks 10 years to pay dues with 2-year moratorium

In a letter to Telecom Minister Ravi Shankar Prasad, the Cellular Operators Association of India (COAI) on Thursday asked for a ten-year staggered payment scheme with a two-year moratorium to pay the amount stipulated by the Supreme Court's Adjusted Gross Revenue (AGR) verdict. However, it has requested Department of Telecommunications (DoT) to waive off interest, penalty and interest on the penalty, which has been imposed by the Supreme Court of India in its order as a result of which, the total amount that they have to fork out is Rs 133,000 crore.

In an addendum to its previous letter asking for waiver of the entire disputed amount, COAI argued that the government 'waive off the interest, penalty and interest on penalty'.

It has also argued that as the disputed amount goes back to accumulation over 14 years, the principal repayment of past dues be done over ten years, with a two-year moratorium as well. A copy of the letter has also been sent to DoT secretary Anshu Prakash.

In a blow to telecom operators, the Supreme Court on October 24 rejected their plea to revise the government’s definition of adjusted gross revenue (AGR) and refused to give them any relief on their pending payment of close to Rs 50,000 crore.

CCI to conduct study on telecom sector amid changing market dynamics

Fair trade regulator CCI will conduct a study about the Indian telecom sector to assess various competition aspects as the market dynamics have undergone significant changes in the recent past, according to its Chairman Ashok Kumar Gupta.

From time to time, the watchdog commissions studies through independent agencies to gather qualitative as well as quantitative information and insights from market participants and assess the state of competition in a given sector.

In an interview to PTI, Gupta said the Competition Commission of India (CCI) has started the preparatory work for the study about the telecom sector and it is expected to commence in November.

"As a market regulator, it would give us insights into what we need to be watchful of, and what we need to do. This, would also enable the Commission to craft a competition advocacy strategy and recommendations tailored to the needs of the telecom sector," he said.

The country's telecom sector has witnessed a churn with stiff competition, especially after the entry of Reliance Jio, and the lower tariff regime that has impacted the financials of market players. There has also been consolidation in the market.

"Given the criticality of the telecom services and their overarching interface across economy, it becomes imperative for market regulator to keep a close watch on the developments in the sector.

"The telecom market dynamics have undergone a significant change in recent past by way of entry of new player, wave of consolidation, change in competition strategies and business models in the sector," Gupta said.

According to the CCI chairman, the new market construct has thrown up many questions such as whether concentration has negated the objectives of competition or the present level of competition is sufficient. There are also questions on whether the market power in telecom can be used or misused in monopolising any niche market that essentially depends on telecom services, he added.

The study would gather relevant information and data from the stakeholders to provide a clear understanding of the developments in telecom market.

Besides, it would look at "markets that are closely connected with telecom markets, in terms of the prevailing competition landscape, patterns of consumer and business behaviour, impact of regulatory and policy developments on competition, interplay amongst markets," Gupta said.

Currently, a study about the e-commerce sector is underway as the CCI seeks to have a better understanding of the e-commerce ecosystems in India, business practices of online platforms and other market participants that avail the platforms' intermediation services and their implications on competition.

The regulator's studies about sectors mainly look at the existing competition conditions, the regulatory architecture and the perspective of consumers as well as concerned stakeholders.

Telecom industry's move towards oligopoly to impact tower companies: Report

The telecom industry's move towards oligopoly will potentially impact telecom tower companies through factors like tenancy losses, a report said Tuesday.

The number of telecom operators has now reduced to about five from a peak of 15 in 2012, the report by domestic rating agency Crisil's research arm said.

"The telecom sector moving towards an oligopolistic structure, with three players accounting for more than 90 per cent market share, will pose challenges for towercos," it said.

It said the merger of Vodafone and Idea Cellular to create the largest entity by subscribers alone has resulted in over 57,000 tenancy losses for the towers industry as the combined entity consolidated its network.

A further reduction of 21,000 tenancies is expected till September, it said, adding that the exit penalties will only partially offset the revenue loss and the impact of tenancy losses will spill over to FY20 as well.

The reduction in operators and concentration of the market in the three companies will also put pressure on rent revenue per tower as the number of tenants per tower would go down. The stressed financial condition of debt-laden telecom incumbents will also restrain any material hike in rentals, at least over the medium term, it added.

Even though state-run Bharat Sanchar Nigam (BSNL) and Reliance Jio are adding towers, they are captive ones which does not expand the industry's revenue base, it said. In the last 12 quarters, there has been a stabilising trend till the first half of financial year 2018 and then a drop for the first time in five years in the second half of fiscal 2018 owing to tenancy losses, it said.

Citing its interactions with the industry, the analysts said telcos are currently focusing on densification of the 4G networks. The replacement of 2G and 3G BTSs (base transceiver stations) with 4G ones will slow down net BTS additions to 1.55 lakh in FY20, against 2.75 lakh in FY19, it said.

The number of BTSs per tower is, however, expected to increase marginally to 3.85 in FY20 from 3.67 in FY19, on increased loading by telcos to increase their capacity per site and support existing coverage during high traffic and congestion, it added. It said the fall in rentals has dented tower valuations and called out valuations as a key monitorable from here on.