Spectrum auction decision welcome; lower reserve prices would've allowed more resources: COAI

New Delhi, Dec 16: Industry body COAI on Wednesday welcomed the government''s decision to auction spectrum by March 2021 but said lower reserve prices would have freed-up additional resources for network expansion by telcos.

Cellular Operators'' Association of India (COAI) - whose members include Reliance Jio, Bharti Airtel and Vodafone Idea - said high reserve prices in the past auctions have resulted in large amounts of spectrum remaining unsold.

"We welcome the government''s decision to auction spectrum by March 2021. This will enable the industry to cater to the exponential increase data usage and continue supporting the Digital India vision," COAI Director General SP Kochhar said in a statement.

While the government has addressed the requirement for more spectrum, lower reserve prices would have provided additional resources for network expansion to the telcos, COAI said.

"High reserve prices in past auctions have resulted in large amounts of spectrum remaining unsold. We hope the government will take additional measures to boost the financial health of the industry, which is the backbone of a digitally connected India," the apex association said.

PHD Chamber of Commerce and Industry telecom committee head Sandeep Aggarwal said the decision to auction spectrum is in the right direction, which will give the much-needed push to the telecom sector.

"In the times of corona pandemic when the economy is now slowly showing an uptrend, spectrum auction will further boost economic sentiment. The money that the government will earn from the auction of the spectrum will be pumped into the economy, thus working as a stimulus," Aggarwal said.

The Union Cabinet on Wednesday approved a proposal for the auction of 2,251.25 megahertz of spectrum worth Rs 3.92 lakh crore at the base price.

The telecom ministry plans to issue a notice to invite bids in December and hold the spectrum auction by March, telecom minister Ravi Shankar Prasad said.

The government, however, has decided not to auction frequencies in 3,300-3,600 Mhz bands that were identified for 5G services.

Aggarwal also said the government decision to set up a National Security Committee on Telecom will strengthen India''s national security at a time when cyber-attacks and the vulnerability of our networks are on the rise.

In a bid to tighten the security of communication networks, the Cabinet Committee on Security on Wednesday announced the National Security Directive on the Telecommunication Sector, which will mandate service providers to purchase equipment from trusted sources.

Under the provisions of this directive, the government will declare a list of trusted sources and trusted products for installation in the country''s telecom network.

"The industry will cooperate and coordinate with the government in identifying ''trusted sources''," Aggarwal said.