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TRAI releases recommendations on ‘Valuation and Reserve Price of Spectrum: Licenses expiring in 2015-16’

October 16, 2014

The Telecom Regulatory Authority of India (TRAI) has released recommendations on ‘Valuation and Reserve Price of Spectrum: Licenses expiring in 2015-16’. According to TRAI, the upcoming auctions in February 2015 are crucial for the telecom operators whose licences will expire in 2015-16.

In the 900 MHz band, only the spectrum currently held by the operators will be available for auctions and they will have to win back the spectrum to ensure continuity of business in these service areas. TRAI has suggested that Bharat Sanchar Nigam Limited (BSNL) will have to surrender 1.2 MHz spectrum in the 900 MHz band from all 22 circles and in return will be assigned 1.2 MHz in the 1800 MHz band in the Gujarat, Rajasthan and West Bengal circles.

On valuation, the telecom regulator has asked for fresh valuation of reserve price in 1800 MHz band and 900 MHz band. The reserve price for the 1800 MHz band has been recommended as Rs 21.38 billion per MHz of spectrum, which is lower than that for February 2014 auctions. The reason for the lower prices is the non-availability of spectrum in the two circles of Maharashtra and West Bengal. Moreover, the reserve price for 900 MHz band has been recommended as Rs 30.04 billion per MHz in 18 circles as no spectrum for auction is available in Jammu and Kashmir, Delhi, Kolkata and Mumbai circles.

In addition, TRAI has recommended that the reserve price for Northeast circle can be given a 50 per cent discount to increase telecom investments in the region.

Further, TRAI has recommended the availability of the entire 2100 MHz for the upcoming auctions. It also suggested the auctions must be conducted only after clarity on the spectrum vacation by defence and BSNL in 2100 MHz and 900 MHz bands respectively.

 
 

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