The Department of Telecommunications (DoT) will make a back reference to the Telecom Regulatory Authority of India (Trai) for its recommendations on the proposed auction of 700 MHz band.
A DoT committee is currently examining the earlier recommendations of the regulator on the auction. The report of the committee will be placed before the Telecom Commission for its approval for making “back reference” to Trai, according to a recent DoT communication..
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DoT has earlier stated that auction of 700 MHz is likely to be conducted over the next two years. While the proposal for auction was mooted few years ago, the government did not do it, as the 700 MHz spectrum is considered as one of the most efficient bands worldwide.
According to a DoT official, details of technology, process of allocation, availability, and tentative schedule are currently being worked out. Also, DoT will have to seek Trai's suggestion on valuation and reserve price of the spectrum.
DoT has about 100 MHz of spectrum available in the 700 MHz band that can be auctioned. It was earlier looking to offer up to 10 MHz in each circle, in eight blocks, with no restriction for operators on the number of blocks they want to bid. It is likely 2x45 MHz would be auctioned, while 10 MHz would be kept in between as a guard band.
In its first recommendation, which is currently being examined by the committee, Trai had suggested that spectrum in the 700 MHz band be priced at four times the 1,800 MHz base price. Considering the price of 1,800 MHz spectrum in the February auction, the base price for 1 MHz of pan-India spectrum in the 700 MHz band would be about Rs 9,000 crore, and a little more than Rs 45,000 crore for 5 MHz of pan-India spectrum.
Last year, Trai chairman Rahul Khullar had told Business Standard that auction of the 700 MHz band was unlikely before 2015-16, as the government had yet to decide which technology should be adopted for 700 MHz airwaves.
At present, countries like the US, Australia, and in Latin America, are either using or are setting up long-term evolution (LTE) networks on 700 MHz spectrum. There are more than 280 devices available that can be used for 4G (fourth generation) or LTE services on this spectrum.
Earlier, the industry had asked for option to switch 2,300 MHz band spectrum with the 700 MHz band for LTE or 4G services. While this has been discussed, the plan seems to be on the back-burner. If the swap option was permitted, broadband wireless access (BWA) spectrum holders such as Reliance Jio, Bharti Airtel and Tikona Digital would have been benefited. According to industry experts, 700 MHz band would require only about half the number of towers for offering the same quality of service as 2,300 MHz spectrum, which would reduce rollout costs substantially.