Top Mutual Funds
- 12 Apr 2022
- ICICIdirect Research
-
Share
-
-
-
-
-
TRAI RECOMMENDS 36% CUT IN 5G SPECTRUM
News: Trai has recommended ~35.6% cut from its earlier proposed base price for the auction of 3300-3670 MHz band, a prime spectrum for 5G networks. It has recommended a base price of Rs 317 crore/ Mhz for a pan-India basis vs. previously recommended pricing of Rs 492 crore, for the same. Thus, outgo for 100 Mhz of pan India 5G spectrum would be ~Rs 31700 crore. Similarly, 700 Mhz spectrum, pricing has been cut by 40.2% to Rs 3927 crore/Mhz for pan-India vs. Rs 6568, earlier, with total outgo for 10 Mhz (optimum requirement) pegged at Rs 39700 Mhz vs. Rs 65680 crore, earlier. Other measures such as easing payment terms and rationalising spectrum caps (doing away with pan-India cap of 33% and pegging band wise cap at 40% vs. 50%, earlier)
Views: We highlight that while the 5G spectrum price cut is optically lower than telcos demand of 90-95% cut, directionally there seems to be some relief for telcos in pricing along with easing of payment terms with flexibility of moratorium. Key, in our view, would be whether key player would also go for 700 Mhz, which in our view, is still pricey and may stress the balance sheets
Impact: Neutral