The Telecom Regulatory Authority of India (TRAI) has floated a consultation paper to arrive at a floor price for auction of spectrum in the 800 MHz band, therefore bringing to an end a long-standing confrontation with the Department of Telecommunications (DoT) over the issues of whether to auction spectrum in this band.
Despite TRAI?s persistent stand that spectrum in the 800 MHz band, traditionally used by the CDMA operators should be reserved and used as an extended GSM band, the Empowered Group of Ministers asked the regulator to recommend reserve price for auctioning the spectrum, thereby backing DoT?s views that the spectrum in the 800 MHz band should be auctioned.
In its consultation paper, the regulator has put up nine questions before the industry on the methodology to be followed for the auction of the spectrum in the 800 MHz. The last date for the industry stakeholders to submit their comments and counter comments on the subject is January 15 and January 22, 2013 respectively. TRAI has sought views of stakeholders on the quantum of spectrum to be auctioned, the block size and whether reserve price should be fixed at 1.3 times that of spectrum in the 1800 MHz band. TRAI has stated that while spectrum in the sub-1 GHz band is extremely efficient, the quantum of spectrum, which the government will auction is unknown and will be decided by the government separately. Therefore, the regulator is open to using a multiple of 1.3 instead on the grounds that in case the government auctioned at least 5 MHz of spectrum in the 800 MHz band, then the operators will be able to use this spectrum for providing technology-agnostic services under the liberalised spectrum licencing regime. However, if the government decides to auction less than 5 MHz of spectrum, then the choice of technology to be deployed for providing telecom services will be restricted.
The consultation paper also suggests restricting Sistema Shyam Teleservices Limited?s (SSTL) participation in the eight circles where it had acquired three blocks of spectrum totaling 3.75 MHz in the previous round of spectrum auction. According to TRAI, if spectrum is put up for auction in these 8 circles and SSTL acquires even a single block of spectrum (1.25 MHz) in any one of these circles, it will have a total holding of 5 MHz of spectrum in a particular circle, enabling it to provide all the services using liberalised spectrum. Further, the regulator has stated that if SSTL reaches a holding of 5 MHz of spectrum in the forthcoming auction, it would have acquired 3.75 MHz of spectrum in the previous round of spectrum auction, at a price that was 50 per cent of the recommended reserve price for a sub- 5 MHz of spectrum up for auction. Therefore, restrictions must be put on the operator?s participation in these eight circles.
