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An internal committee set up by the Department of Telecommunications (DoT) has suggested that the reserve price of 2G spectrum to be auctioned should be up to 80 per cent higher than the reserve price recommended by the Telecom Regulatory Authority of India (TRAI).
According to the DoT committee, TRAI?s recommendation to reduce the reserve price of 2G spectrum in the 900 MHz and the 1800 MHz bands by up to 60 per cent and 37 per cent respectively is lower than the market value of 2G spectrum. In addition, the committee has also stated that the government must auction spectrum in the 800 MHz band, as against TRAI?s suggestion of using this band as an extended GSM band.
Since TRAI has not suggested a pan-India reserve price for spectrum to be auctioned in the 900 MHz band, DoT committee has computed the price of spectrum in the 900 MHz band as two times the proposed reserve price of spectrum in the 1800 MHz band. The committee has suggested a reserve price of Rs 44.06 billion for 2G spectrum to be auctioned in the 900 MHz band.
In addition, the committee has put the reserve price for pan-India auction of spectrum in the 1800 MHz at Rs 22.03 billion, 47 per cent higher than the reserve price recommended by TRAI. The regulatory body had suggested that spectrum in the 1800 MHz should be auctioned at a reserve price of Rs 14.96 billion. The committee determined the reserve price for one MHz of spectrum in the 1800 MHz band by extrapolating the 2001 market determined price for the four service areas where the government could not sell spectrum in the last round of spectrum auction.
The Telecom Commission will take the final decision on the suggestions made by the DoT committee and TRAI on 2G spectrum pricing in the 900 MHz and the 1800 MHz band.
