Telecom EGoM may seek Trai's view on spectrum pricing

The EGoM will also decide the date for the next round of auction in its next meeting, which is yet to be scheduled

The Department of Telecommunications (DoT) has placed an option before the Empowered Group of Ministers (EGoM) on telecom. Either seek a fresh opinion from the Telecom Regulatory Authority of India (Trai) on the price of spectrum or revise the price downwards on its own. Alternatively, the EGoM could decide to keep the base price unchanged, according to a DoT communication.

Once the EGoM takes a decision, its recommendations will be sent to the Cabinet for approval.

On its part, DoT will seek necessary direction from the Cabinet on one-time charges for spectrum currently held by the operators.

The EGoM, when it meets, will also give guidelines on whether the entire quantity of the remaining spectrum in 800 MHz band should be auctioned and whether auction for the 900 MHz band needs to be conducted together with auction of 1,800 MHz band.

According to the DoT communication, it takes about 50 days to complete an auction, based on the past two rounds of auctions. It has asked the EGoM to decide the timeline for the next round of auction accordingly.

In an earlier communication, DoT had indicated it would hold the next auction in May or June.

A decision on the next round of auction has become imperative after the Supreme Court asked the government to auction the entire quantity of spectrum vacated due to cancellation of 122 operating licences.

Having failed to get bidders for the key circles of Delhi, Mumbai, Karnataka and Rajasthan for 1,800 MHz band of auction conducted in November 2012, the government had reduced the base price by 30 per cent for the auction in March this year. However, no operators evinced any interest in bidding for the four circles.

The government had also reduced the base price for 800 MHz spectrum, which did not get any bidder in the November auction. In the March auction, it did not get any bidder except Sistema Shyam Teleservices, which chose to bid selectively.

According to Trai’s recommendations on spectrum pricing, 800 MHz is 1.3 times the base price of 1,800 MHz and the base price for 900 MHz spectrum is double that of 1,800 MHz. The telecom EGoM is expected to meet soon to decide on the base price of spectrum that would be auctioned in the next round, the date for which is yet to be decided.

To comply with the SC order, the government will have to auction 286.10 MHz of spectrum under the 180 MHz band.

It will also have to auction 42.5 MHz of spectrum in 90 MHz band in Delhi, Mumbai and Kolkata telecom circles as some licences will be due for renewal in November 2014.