Spectrum auction will trouble operators more

Blame it on spectrum! That’s been the alibi of telecom operators on many of the ills in the system, including the call drop menace. As India readies for the next round of airwaves auction — bigger than the $17-billion previous round — what does it herald? Stakeholders concede the next round of auction will put on the block the widest range of these scarce airwaves — in the bands 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz and 2,500 MHz.

Further, going by the base price recommended by the Telecom Regulatory Authority of India (TRAI), the industry watchdog, and the quantum that will be auctioned, the mop-up’s expected to be some Rs.560,000 crore, or a whopping $83 billion, payable over the tenure of the contract. This is where the misgivings have already started. Industry estimates suggest telecom companies are already reeling under a debt of more than Rs 300,000 crore. At the recommended prices, the auction will swell their debt burden by as much as 185 percent.

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