Telecom

Spectrum auctions in India likely in second half of 2020, says Moody's

Updated : June 28, 2019 06:53 AM IST

The Telecom Regulatory Authority of India (Trai) has recommended auction of about 8,644 MHz of telecom frequencies at an estimated total base price of Rs 4.9 lakh crore, which includes radio waves for 5G services.

Telecom operators in India, Indonesia, and Bangladesh continue to focus on further strengthening and densifying their 4G networks.

Spectrum auctions in India likely in second half of 2020, says Moody's

The proposed spectrum auctions in India, which includes radio waves for 5G technology, are likely to be held only in the second half of 2020 or later, given the stressed balance sheets of telecom operators, Moody's Investors Service said Thursday.

"Regulators in countries such as India, Indonesia, and Bangladesh are still initiating consultations with operators and are likely to schedule 5G spectrum auctions only in the second half of 2020 or later," Moody's Investors Service said in a report.

It said that the Indian government has identified the 5G spectrum (3.3-3.6 GHz).

"However, sale of spectrum in 2019 is unlikely, especially given the telcos' request to the government to restructure their existing spectrum debt in light of their stretched balance sheets," the report said.

All telecom operators, except Reliance Jio, have been under pressure due to huge debt and decline in margins.

According to Crisil, telecom players in India are reeling under cumulative debt of around Rs 4.3 lakh crore.

"Even though there are signs of market recovery this year, severe price competition in India and Indonesia is leading to an acceleration in capex plans for companies. Although 5G spectrum allocation timelines are still being discussed in these countries, we expect all companies to participate in these spectrum auctions," Moody's said.

Telecom operators in India, Indonesia, and Bangladesh continue to focus on further strengthening and densifying their 4G networks.

The report said that most of the countries in the Asia-Pacific region are offering spectrum at low prices to help companies leapfrog into 5G services, and to incentivise operators.

"India seems to be an exception given spectrum pricing is still quite contentious," the report added.

Disclosure: RIL, the promoter of Reliance Jio, also controls Network18, the parent company of CNBCTV18.com.

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