For the first time in the country, Telecom Regulatory Authority of India (TRAI) on Wednesday recommended the Government auction Rs11,485 crore per Mhz pan-India base price for premium 700 Mhz spectrum - the highest rate for any telecom frequency band. As the 700 Mhz spectrum band is considered the most efficient frequencies for high-end mobile services, leading telecom operators have sought holding back sale of the radiowaves in this band for the next round of auction. It is expected that the next round of auction will be held in May-June this year.
The telecom regulator in its recommendations on spectrum price for seven bands, including 700 Mhz and 800 Mhz, released on Wednesday evening, suggesting a base price of Rs2,873 crore per MHz for pan-India 1800 MHz frequency band, which is popularly known as 2G spectrum. The suggested price of 1800 MHz band is about 31 per cent higher than the base price fixed by the Government in March 2015 auction.
As per TRAI’s paper, the cost of delivering mobile services in 700 Mhz band is approximately 70 per cent lower than 2100 Mhz band, which is widely used for 3G services. leading operators had requested the regulator to defer sale of 700 MHz spectrum, saying that ecosystem for providing services in this band was not developed and sale would lead to underutilisation of the spectrum for several years and block industry’s crucial fund.
The regulator, which had mooted an idea of removing band-wise spectrum holding limits in its draft paper, however, suggested no change in existing rules. The regulator also recommended auction of all 3G spectrum available with the Government at a marginally high rate of Rs3,746 per Mhz pan-India against Rs3,705 crore per MHz fixed by the Government for the same in March 2015 auction.
It also recommended auction of 800 Mhz band, widely in demand for 4G services, at a base price of Rs5,829 per Mhz. The new price is about 60 per cent higher from base price of Rs 3646 crore fixed in last auctions. TRAI has suggested auction of 800 Mhz in 19 out of 22 telecom cirlces.
Earlier, the Government had fixed the highest base price at Rs3,980 per MHz for 900 spectrum band in last auction. The Government had fixed Rs2,191 crore pan-India (excluding Maharashtra and West Bengal) price for 1800 MHz band in previous auction held in March 2015.
As per the recommendation paper, airwaves in 1800 band were available only in seven out of 22 telecom circles. Of the seven circles, it recommended the Government not to auction spectrum in Bihar, Rajasthan and North-East due to partial availability of airwaves.
TRAI also recommended auction of spectrum in 900 Mhz in six service area - Gujarat at base price of Rs673 crore per Mhz, Karnataka for Rs558 per Mhz, Haryana for Rs151 per Mhz, UP East for Rs776 per Mhz, UP West for Rs739 Mhz and Bihar for Rs444 per Mhz.
The regulator has recommended to take back 1800 MHz band spectrum assigned to Aircel in Haryana and Madhya Pradesh and Tata Teleservices in Himachal Pradesh as well as 800 MHz band spectrum assigned to Tata in West Bengal and Quadrant (Videocon) in Punjab and put these frequencies on auction.
The regulator also suggested base price for 2300 Mhz and 2500 Mhz band. It recommended Rs 817 crore per Mhz for spectrum in both 2300 Mhz and 2500 Mhz band, about 33 per cent higher than base price fixed for their last auction held in 2010. Reliance Jio in the only player to have 2300 Mhz spectrum across India at present.
The regulator in the consultation paper showed that right to use spectrum of state-run MTNl is also expiring in 2016 but the Department of Telecom later informed it that it will expire in 2019. Hence, it did not recommend auction of spectrum held by MTNl.
The regulator also did not recommend price of 800 Mhz in Assam, North East and Jammu and Kashmir service area. Though TRAI had mooted removing band-wise spectrum limit in draft paper, it stuck to existing rules. “The Authority recommends that existing provision of a cap of 25 per cent of the ‘total spectrum assigned’ in 700/800/900/1800/ 2100/2300/2500 MHz bands and 50 per cent within a given band in each of the access service area shall apply for total spectrum holding by each telecom service provider,” the regulator said.