Govt can garner Rs 90K cr from 1.8Mhz of 2G spectrum sale: Trai

The government can collect over Rs 90,000 crore by allotting additional 1.8 Mhz of 2G spectrum to six new operators with pan-India operations, going by Trai's draft recommendation for 2G spectrum pricing.

Telecom Minister Kapil Sibal has fixed the contracted amount of start-up spectrum at 4.4 Mhz for new operators (who got licences in 2008) vis-a-vis 6.2 Mhz for old operators like Bharti, Vodafone and Idea.

As per the new policy, the new operators would have to pay market price for additional 1.8 Mhz of spectrum to come at par with the old operators.

Sources in the know said that Trai is contemplating a maximum price of Rs 707.28 crore per Mhz of spectrum (1800 band) for the Uttar Pradesh (East) circle followed by Rs 617.09 crore per Mhz for Rajasthan circle.

According to Trai's draft recommendations, the pan-India value for 1.8 Mhz would cost a new operator over Rs 15,082 crore to take the initial start-up spectrum to 6.2 Mhz level on par with old operators.

Trai is in process to give its recommendations on 2G spectrum prices. Earlier, it had proposed linking 2G spectrum prices with 3G. This was opposed by the incumbent operators following which the Trai had said that it would re-visit the matter.

Meanwhile, Telecom Minister Kapil Sibal has announced new spectrum policy and delinked spectrum from licence. According to the new regime, the operators would have to pay a market price for start-up as well as additional spectrum.

While announcing the policy, the minister had said that the ministry would wait for Trai's recommendations on spectrum pricing and then a final decision would be taken on whether to follow the auction route or fix a market-driven price for each Mhz of spectrum.

Each Mhz of spectrum on pan-India basis would cost over Rs 8,380 crore with highest bid in Uttar Pradesh (East), according to draft recommendations.

According to industry analysts, the new regime of spectrum pricing may push upward tariffs for mobile services, as the operators would have to pay heavily for procuring airwaves compared to earlier policy whereby the operators were getting start-up spectrum bundled with licence for Rs 1,658 crore for pan-India operations.