DoT likely to put 800 MHz spectrum pricing issue in EGoM's court

The Department of Telecommunications (DoT) is likely to seek the opinion of the Empowered Group of Ministers (EGoM), headed by Finance minister P Chidambaram, on whether it should make a fresh reference to the Telecom Regulatory Authority of India (Trai) to finalise valuation and reserve price of 800MHz spectrum.

The EGoM is scheduled to meet on 22 November.

According to a source at the DoT, the ministry had asked the regulator to give its suggestions on the valuation and pricing of 800MHz spectrum as the Government wanted to auction 800MHz spectrum together with 1800MHz and 900MHz bands.

The EGoM may take a decision on whether it needs Trai recommendations on the matter, or if the reserve price can be fixed following previous models as the Government has already fixed the reserve price of 1800Mhz spectrum, added the source.

Trai has already refused to give its recommendations on pricing and valuation of 800-MHz spectrum within the 15 days stipulated by the DoT. The regulator, in a communication dated November 14, has said DoT must make a “fresh and new” reference if it wants Trai’s suggestions on pricing for the band.

Earlier, a DoT Committee has suggested two alternatives for fixing the reserve price -- it could be based on the price fixed in the earlier auction or it could be deduced from the 1800 MHz price which would be finalised with a multiplying factor of 1.3 and the final number halved as was undertaken in the March 2013 auction where Sistema was the only participant. The pan-India reserve price for 1MHz of 800MHz spectrum was Rs 1820 crore March 2013 auction.

The committee had also said that to declare CDMA technology as dying is not appropriate, there are uncertainties in carving out EGSM band, and that auction of 800MHz should be conducted as has been decided earlier by the EGoM.

Earlier this month, the Telecom Commission had rejected Trai’s suggestion that an extended GSM (EGSM) band be created out of 800-MHz CDMA spectrum. Following this, on November 12, DoT had sought the regulator’s views on valuation and pricing of 800-MHz band.