The Telecom Commission (TC), the Department of Telecommunications (DoT)’s highest decision-making body, on Thursday approved the auction of 10 MHz of spectrum across all circles in the 1,800 MHz band, which is used for 2G services.
The decision could provide relief to GSM operators, as the Telecom Regulatory Authority of India (Trai) had initially recommended auctioning only 5 MHz of spectrum across the country. However, later, it had changed its stance, saying up to 10 MHz could be auctioned only in circles where surplus was available after accounting for spectrum needed for refarming. On that basis, 15 of the 22 circles would have surplus spectrum.
Confirming the decision taken at the meeting, Telecom Secretary R Chandrashekhar said the commission wanted at least 10 MHz of airwaves to be auctioned in each telecom zone. A top-up provision, in case a new operator had less than 5 MHz in a circle, was also considered. Besides, the commission also decided to liberalise spectrum.
He said the decision on the auction base price was likely to be taken at a meeting scheduled later this week.
The commission prefers earlier roll-out obligations, compared to the rural roll-out ones recommended by Trai.
The allocated spectrum would be auctioned in eight blocks of 1.25 MHz, in which existing operators would be allowed to take two blocks of 1.25 MHz each and new operators can take up to four blocks of 1.25 MHz.
GSM operators had criticised Trai’s decision to limit the amount of spectrum, saying this would create artificial shortage of spectrum and force aggressive bidding, as had happened in the 3G auctions. These operators say the high spectrum price is one reason why 3G services are unviable.
However, the meeting stayed clear of taking a decision on other contentious issues, including the base price for auctioning the 1,800 MHz band and a staggered payment scheme. The commission would meet again on Saturday to take up the remaining issues.
The commission also accepted a liberalised regime for spectrum, which means operators would now decide whether they want to use the 1,800 MHz band for 2G services or for launching 4G long-term evolution ones.
Provisions for refarming of spectrum from the 900 MHz band to the 1,800 MHz band, which was opposed by incumbent GSM operators, has been subjected to the availability of spectrum.
Trai had pegged the base price at Rs 3,622 crore, but an internal committee set up by DoT had increased the base price to Rs 4,245 crore, saying the 3G price which formed the basis for the calculation should be indexed for two years to State Bank of India’s lending rate. GSM operators had criticised the Trai recommendation, saying it would lead to a major impact on rates. Rejecting the Trai calculation that the impact of the high spectrum price would be only 4 paise over a 20-year period, the Cellular Operators’ Association of India said it would be as high as 26 paise across the country, and 90 paise in metros.
Some new operators such as Uninor and MTS had earlier indicated they would not participate in the bidding process at such high reserve prices.
The TC also said if necessary, additional spectrum might be made available. The TC decisions would now be sent to an empowered group of ministers headed by Finance Minister Pranab Mukherjee.