The Telecom Regulatory Authority of India (TRAI) has received a reference from the Department of Telecommunications (DoT) for providing recommendations on spectrum pricing for the upcoming spectrum auction. Following DoT?s reference, TRAI will request the telecom operators for their views on the subject.
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DoT has asked TRAI to give its recommendation on the price of 2G spectrum in the 900 MHz and the 1800 MHz bands. TRAI also has to submit its recommendations on the price of unsold CDMA spectrum in 13 circles.
Earlier, for pan-India 2G spectrum, TRAI had recommended a 10-fold increase in base price, compared to 2008. Based on the regulator?s recommendations, the reserve price for 5 MHz of spectrum in the 1800 MHz band (which was freed up following the cancellation of 2G licences) was set at 182 billion. The base price for spectrum in the 900 MHz band was two-fold higher than that of spectrum in the 1800 MHz band. Further, the price for CDMA spectrum was fixed at a 1.3 times higher price than spectrum in the 1800 MHz band.
However, after meeting with an adverse reaction from the industry, the government reduced the price of spectrum in the 1800 MHz band by 23 per cent for the first round of auction and by 30 per cent more for the second round. The price for CDMA spectrum was reduced by 50 per cent. Despite reducing the price, the government received a tepid response from the industry.
The regulator?s fresh recommendations on spectrum pricing will be presented before the Empowered Group of Ministers, which will further gives its suggestions to Cabinet for fixing the final spectrum price.
