TRAI starts final meetings for its view on spectrum price
New Delhi: Telecom regulator TRAI is holding internal meetings to finalise its recommendations on spectrum pricing for the third round of auctions as the 60-day timeframe given to it ends next week.
"The full authority met today and will also meet tomorrow again (to discuss spectrum issue)," a sources said without disclosing further details.
The Empowered Group of Ministers on spectrum matters, headed by Finance Minister P Chidambaram, met on June 26 to discuss measures for the proposed third round of spectrum auctions. It decided to seek recommendation from the Telecom Regulatory Authority of India.
The Department of Telecom approached TRAI on July 10 and as per the decision the 60-day deadline ends on September 10.
Industry insiders say they expect the regulator to slash base price of spectrum, which remained unsold in the November 2012 auction, by up to 70 percent. They also hope that the price of premium 900 Mhz band, currently being used for 2G services, may be cut by 50 percent.
The government is required to conduct the third round of spectrum auction for 1800 Mhz in 20 out of 22 circles to comply with a Supreme Court order. It directed the government to auction the entire spectrum freed from cancellation of 122 licences in February, 2012 in the 2G spectrum allocation case.
It has to also conduct the auction for premium 900 Mhz band being held Airtel, Vodafone and Loop in some select circles as their licences expire in the second half of 2014.
As per the new rule these companies will have to take new licences for continuing to provide services. Unlike current practice, where airwaves come bundled with licences, spectrum will have to be allotted through auctions.
The government had put on sale 271.25 Mhz of spectrum in November 2012, including 60 Mhz of CDMA spectrum. As much as 473.6 Mhz of spectrum was freed after the Supreme Court order in February last year. That auction could fetch the government only Rs 9,407.64 crore, as against the estimates of Rs 28,000 crore at base price.
Government again placed unsold spectrum worth Rs 45,000 crore for auction in March 2013 after reduction in base price, but only Sistema Shyam Teleservices made bids worth Rs 3,693 crore for CDMA spectrum.
Later, DoT proposed to EGoM on spectrum to auction airwaves that remained unsold in both the rounds.
For the first round of auction, TRAI had recommended around 11 times base price for telecom airwaves compared to the amount paid by companies in 2008.
After opposition from the industry, government reduced the price by around 23 percent for 1800 Mhz to Rs 14,000 crore for 5 Mhz of pan-India spectrum, but even then the auction failed to sell all spectrum that was kept for sale.