Trai keeps suggested 2,100-MHz base price unchanged

Telecom Commission likely to take the final call on Jan 19

The Telecom Regulatory Authority of India (Trai) on Thursday returned the clarifications sought by the Telecom Commission, the highest decision-making body in the department of telecommunications (DoT), without any change to the suggested 2,100-MHz spectrum reserve price for the coming auction on February 25.

The Telecom Commission had last week referred the regulator’s recommendations back to it and sought a review, saying the suggested base price was on the lower side. In reply, Trai said the suggested reserve price for 2,100-MHz spectrum remained unchanged.

Trai had recommended a base price of Rs 2,720 crore for each MHz of 2,100-MHz spectrum, while an internal committee of DoT was of the view that it should be over Rs 3,800 crore, on the basis of prices in the previous round of 3G spectrum auction in 2010.

A final decision on the base price is likely to be taken at a meeting of the Telecom Commission, scheduled on January 19. The decision will next week be sent to the Cabinet for approval.

Trai also came down heavily on the government’s decision to auction only 5 MHz of 2,100-MHz spectrum in February.

“The whole purpose of clubbing 2,100-MHz band spectrum with other bands for auction in February this year will be defeated if sufficient spectrum is not made available. Spreading the auction of 2,100-MHz spectrum over two rounds — first in February and the second in December, after the defence services vacate airwaves — would squeeze supply in the February auction, and artificially increase market price,” the regulator said in its clarifications/reconsideration of recommendations on ‘valuation and reserve price of spectrum: 2,100-MHz band.

The 15 MHz of 2,100-MHz airwaves being vacated by the defence services should be auctioned, in view of the in-principle agreement reached with the defence ministry, Trai said. Also, no bidder should be permitted to bid for more than two blocks in 2,100-MHz band in a service area where three-four blocks were available, it suggested.

The regulator said it was DoT’s responsibility to either ensure the spectrum being auctioned was interference-free, or share information upfront about the areas where interference was likely, so that telecom service providers could take informed decisions while participating in the auction.

IT & communications Minister Ravi Shankar Prasad has said the government will auction only 5 MHz of 2,100-MHz airwaves in February, along with the 800-MHz, 900-MHz and 1,800-Mhz bands.

He had earlier said vacation of 15 MHz of spectrum by the defence services through a swapping arrangement was yet to be completed, so the government was not in a position to auction more in February.