Telecom Regulator Suggests Spectrum Pricing For Next Auction

The telecom regulator suggested reserve prices for the next round of spectrum sale and recommended lower prices for the airwaves that went unsold in the last auctions as stressed wireless carriers stayed away.

The Telecom Regulatory Authority of India put up prices for nine bands: 700, 800, 900, 1,800, 2,100, 2,300, 2,500, 3,300-3400 and 3,400-3,600 megahertz, according to recommendations uploaded on its website. The last two will be used for offering faster fifth-generation services.

The regulator recommended that base price for bidding should be 80 percent of the average valuation of spectrum band in the licensed service area or the price realised in the October 2016 auction, whichever is higher. The government is yet to finalise the timing of the next round of auction.

• The regulator has recommended base price of Rs 3,285 per megahertz for 1800 Mhz band on pan-India basis.
• In a relief to industry, TRAI suggested that the reserve price of 700 MHz band should be equal to twice the reserve price of 1800 MHz spectrum band. That has lowered price by 42 percent for this band at Rs 6,568 crore per MHz.
• For 2016 auction, government had fixed base price of 700 Mhz band at Rs 11,485 crore per Mhz.
• The price of spectrum in premium 700 megahertz band was fixed at four times the price of 1800 Mhz band, a frequency range which was famous as 2G spectrum earlier.
• In 2016, spectrum worth about Rs 4 lakh crore was put up for auction but there were no takers for this band due to its high price.

Other Key Recommendations

• Entire available spectrum should be put to auction in the forthcoming auction.
• 3300-3600 MHz should be auctioned as a single band
• Spectrum in 3300-3600 MHz band should be put to auction in the block size of 20 MHz. To avoid monopolization of this band, there should be limit of 100 MHz per bidder.
• No rollout obligations should be mandated for spectrum in 3300-3600 MHz band.
• The revised provisions of spectrum cap (35 percent overall cap and a cap of 50 percent on the combined spectrum holding in the sub-1 GHz bands) should be extended to 3300-3600 MHz band also.
• The regulator's consultation paper for the spectrum auction was issued on August 28, 2017 which was followed by open house discussion before the recommendations were released.

(With inputs from PTI)