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DoT to seek clarity on spectrum pricing mooted by regulator

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The Telecom Commission, the highest policy-making body of the Department of Telecommunications (DoT), has decided to seek clarifications from sector regulator on issues pertaining to the auction of spectrum.

Key issues include the basis of the steep reserve price for 2G band spectrum, the impact of the high base price on consumer tariffs, as well as clarity on the limited amount of spectrum Trai has recommended for immediate auction.

The commission will also seek a clarification on the time frame for reforming of spectrum from the 900-MHz band held by incumbent operators to 1,800 MHz as suggested by the regulator.

“We wanted to understand the basis on which the reserve price has been arrived at... what is the likely impact on tariff?” Secretary said after the commission meeting here on Monday. The DoT will send its queries to Trai by Wednesday and expects the regulator to respond within two weeks. “The commission has not arrived at any judgement as of now whether the reserve price is too high or too low,” he added. Earlier in the day, Trai Chairman said in an interview with Business Standard, “There will be no delay on our part in responding to their queries, as we have already undertaken our analysis.”

The next commission meeting is expected by May 14, after which its final views will be sent to the Empowered Group of Ministers (EGoM) headed by Pranab Mukherjee for a decision. The DoT expects to take a final decision on auction rules by the end of May. The Supreme Court has directed the government to conduct the spectrum auction by August 31. That followed an earlier order on February 2, whereby the court ordered the cancellation of 122 licences issued in January 2008.

Last week, Trai had proposed the reserve price for the auction of spectrum at about Rs 3,622 crore per MHz in the 1,800-MHz band (for GSM services). It also proposed a liberalised regime, with operators allowed to use spectrum for any services.

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