TC asks DoT to reconsider some of Trai's suggestions

Also suggests spectrum base price; DoT has estimated a revenue of at least Rs 9,355 crore from the next round of sale of airwaves

The Telecom Commission (TC) decided at a meeting earlier this week that the department of telecommunications (DoT) should re-examine issues like taking back spectrum from state-run Bharat Sanchar Nigam Ltd (BSNL), as suggested by the Telecom Regulatory Authority of India (Trai).

DoT had earlier rejected Trai’s suggestion that 1.25 MHz of spectrum in the 900-MHz band be taken back from BSNL and a similar amount of 1,800-MHz spectrum be given. The department had contended that this would not be legally tenable.

The Telecom Commission has asked DoT to give its decision to an inter-ministerial panel before its next meeting. The Commission also noted at its meeting that DoT was working on getting the 2,100-MHz spectrum with the defence services vacated.

Besides, the Telecom Commission also asked DoT to re-examine Trai’s recommendation on an extended-GSM band with the unused 800-MHz spectrum currently used by CDMA players. DoT has repeatedly rejected this suggestion, but the Commission wants it re-examine the issue and submit its decision before the next meeting of the panel. The commission has also recommended the reserve prices for spectrum in the 800-MHz, 900-MHz and 1,800-MHz bands for the upcoming auction in February.

Based on a recent discussion, the Commission has recommended a base price of Rs  3,693 crore per MHz for 900-MHz spectrum across 18 circles, about 23 per cent higher than what Trai has suggested.

For 800-MHz band, the Commission has suggested a base price of Rs 3,646 crore per MHz (pan-Indian), about 17 per cent more than the Trai-recommended price. For 1,800-MHz band, it has recommended the base price of Rs 2,191 crore per MHz across 20 telecom zones.

The suggested reserve price for the next auction may be placed before the Union Cabinet after approval from Communications & Information Technology Minister Ravi Shankar Prasad. DoT had recently asked Trai for its recommendations on pricing and valuation of the 2,100-MHz spectrum that it wants to auction in February, along with the 800-MHz, 900-MHz and 1,800-MHz bands. Trai has already floated a consultation paper on this. There were doubts over the 2,100-MHz band, as DoT had earlier said there was no indication from the defence forces on vacation of this spectrum. However, the issue seemed to have been resolved after Prasad and Defence Minister Manohar Parrikar met last month. Their ministries are believed to have sorted the issue.

The telecom industry has long been asking for additional spectrum for commercial use and urging the government to auction radiowaves in the 2,100-MHz band.  The main contention was on the plan that the defence ministry should give 15 MHz of 2,100-MHz spectrum in return for an equal amount of 1,900-MHz spectrum that DoT had kept aside for CDMA operators’ expansion.

Earlier, the two ministries had agreed the spectrum in the 1,700-2,000-MHz band would be equally divided between the two, with each getting 150 MHz.

Simultaneous auction of all bands would benefit the operators, including Bharti Airtel, Vodafane, Idea and Reliance Communications, which had feared a shortage of spectrum would lead to cut-throat competition and raise auction prices.

DoT has estimated that the next round of spectrum auction in February will fetch at least Rs  9,355 crore. According to estimates, auction of spectrum in the 2,100-MHz band could get bids worth at least Rs  5,000 crore.