The Department of Telecommunications (DoT) is likely to ask the Telecom Regulatory Authority of India (TRAI) to reduce the reserve price for the spectrum to be auctioned in the 800 MHz band.
The department?s move comes in the wake of its inability to provide contiguous spectrum for the proposed auction as recommended by TRAI to enable operators to offer 4G services using 800 MHz band.
Earlier, the regulator had recommended a base price of Rs 26.85 billion per MHz for CDMA spectrum, which is 47 per cent higher than the minimum price approved by the Empowered Group of Ministers on Telecom, and 80 per cent higher than the base price of spectrum auctioned in the recently concluded auctions for the 1800 MHz band. TRAI had set a higher reserve price for the 800 MHz band on the ground that though traditionally the band has been used for offering CDMA services, under the new liberalised spectrum rules, it can be used for providing high-speed internet services as well. Further, TRAI suggested that putting up a contiguous block of 5 MHz of spectrum for auction would help government get higher prices for spectrum to be auctioned in the 800 MHz band.
To make available contiguous blocks of spectrum, the TRAI recommended that DoT ask players including Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Nigam Limited (MTNL) and Tata Teleservices Limited (TTSL) to surrender part of their CDMA spectrum holding. DoT has claimed that it may not be possible to meet regulator?s key recommendation of carving out a contiguous spectrum in the CDMA band and therefore TRAI should revise base price suggested by it for the auction.
According to DoT, in four of the 22 service areas, one block of contiguous spectrum is available but in the remaining 18 service areas it may not be possible for the department to carve out contiguous 5 MHz of spectrum in view of the spectrum held by MTNL and BSNL.
State-owned operator BSNL has expressed reservations about surrendering spectrum in the 800 MHz band as its high-end CDMA services cannot be provided using reduced spectrum holding. In addition, the operator has claimed that its mobile services in rural areas will be affected, if its gives up spectrum in the 800 MHz band. Meanwhile, MTNL which holds two block of CDMA spectrum in the Delhi and Mumbai circles has agreed to surrender the spectrum if the government compensates it by paying market price for spectrum to be surrendered for the remaining period of its licence. Further, TTSL has offered to surrender spectrum in the 800 MHz band, subject to the outcome of a court case on payment of a one-time spectrum charge being demanded by the government.
