TRAI Cuts Spectrum Base Price; Brings Cheer to Incumbent Players

In order to attract more bidders who otherwise stayed away from bidding in the last two auctions, Telecom Regulatory Authority of India (TRAI) has today recommended 50-60 per cent reduction in the reserve price of spectrum for the forthcoming auction.

mobile-towerTRAI has recommended that pan-India reserve price for per MHz of 1800 MHz spectrum should be reduced to Rs.1, 496 crore. In 900 MHz band, TRAI has brought down the reserve price per MHz for Delhi Circle to Rs.288 crore, Mumbai to Rs.262 crore and Kolkata to Rs.100 crore. If approved by the government, the move will bring in some good news for the incumbent players such as Airtel and Vodafone as their licenses are to be expired in 2014, post which they have to again bid for the spectrum.

Arvind Bali, Director & CEO, Videocon Telecommunications Ltd. said the recommendations are favorable to the existing players who acquired license prior to 2008, and is penalizing the new players like us.

“We feel that the recommendation recognizes and reconfirms the fact that the reserve price fixed for the Nov 2012 auction was wrong and those who bid for spectrum in the said auction have paid prices which are exorbitantly high,” he said.

TRAI also recommended that for auction of spectrum in 1800 MHz band, the block size should be of 2 x 200 KHz each and the existing licensee will have to bid for a minimum of 3 blocks. A new entrant will be required to bid for a minimum of 25 blocks of 2 x 200 KHz each.

For 900 MHz band, the block size should be 2×1 MHz with the condition that each bidder will have to bid for a minimum of 5 blocks.

Regarding spectrum trading, TRAI said spectrum trading should be permitted and eligibility conditions for spectrum trading and participation in spectrum auctions should be the same.

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  • Adi September 11, 2013 11:15 pm

    @Duane Anthony

    Read the below news
    economictimes.com/news/news-by-industry/telecom/trais-reduced-spectrum-prices-will-lead-to-rs-30k-cr-loss/articleshow/22465903.cms

    If government will not reduce spectrum charges then also Airtel and Vodafone has to buy spectrum in Delhi n Mumbai to continue the services. So at reduced cost Govt will lose 30K Cr rupees.

    This move is not good for the industry but for AVOID group. If trai thinks about industry then why they didnt lower the price in previous auction even due to this some of the players exit from india. Now when it becomes urgent need of Airtel and vodafone to buy spectrum in delhi n mumbai they recommend to cut the price. This is not the first time Trai is betting for AVOID they have also supported AVOID groups illegal 3G roaaming pact .
    In the last I want to say that you are not the onlyy one who has better knowledge about telecom. Hope from the next time u will do better research before commenting.

  • sunny September 11, 2013 5:18 pm

    @ saurabh ….query is out of topic but i need…..plz clarify
    why other private operator are giving account validity(both for gsm and cdma) for more than 3 to 4 years or more ,,like an example i bought other OPERATOR SIM sim 3 years before some 2 years before and i have not recharged even 20 rs in this duration but my sims are still active and validity is upto 2022,2015 etc.. but in case of BSNL THE MAXIMUM validity is 180 days and after that u have to recharge with some plan voucher ,,means u cant make a single call irrespective of ur main balance..my question is that ,does TRAI make the same rules for bsnl and other private operator ,,and exactly what is rule for validity issue.. if yes then who is doing wrong ,, either BSNL or private operator ,,, in both case BSNL IS SUFFERER…EITHER BSNL SHOULD STOP THIS VALIDITY EXTENSION PROBLEM OR OTHER OPERATOR SHOULD FOLLW THE PRESCRIBED RULES..

    • Tharun George September 12, 2013 10:40 am

      All private operators have stopped validity. All are lifetime plans. Lifetime is defined as till the date the operator has license in your circle.

      But BSNL still has validity which has to be renewed every 90/180days with plan voucher. Even there lifetime plan has only 6 months validity.

  • Dev September 10, 2013 9:15 pm

    Kya Uninar Fir Se PUNJAB Me Aayega.

    • Saurabh September 11, 2013 8:28 am

      Yaar pehle kaunsa tha Uninor Punjab mein? Sasta chahiye toh Videocon le le :D

  • nasir ansari September 10, 2013 4:21 pm

    it is the best web at this time because it the fast and good responsibility

  • Prakash05 September 10, 2013 2:04 pm

    kya fir se west bengal main uninor aayega?

  • Adi September 10, 2013 9:48 am

    Looks like TRAI officers got money from AVOID group to lower the spectrum base price upto 80%.

    • Duane Anthony Bayliss September 10, 2013 1:12 pm

      @ Adi – whats the source of this info ?
      Whenever something good (for the industry and end customer) happens, we say that the AVOID group bribed the DOT / TRAI officials? Nonsense!

      • Prakash September 10, 2013 2:00 pm

        Kya fir se uninor west bengal main aayega?

      • Rama September 10, 2013 4:23 pm

        Its clearly mentioned in the article that the move comes in at a time when big telecos like vodafone and airtel have to bid for new licence as their current is going to expire at 2014 and around 2 to 3 years ago GSMA had sent a letter to the indian government that it should not charge highly for spectrum and make it a source of high revenue at that time TRAI did not do anything then why this sudden reduction

  • Kaushik September 10, 2013 8:38 am

    Good news. Hope aircel and docomo purchases 3G licenses in mumbai

    • Saurabh September 10, 2013 10:21 am

      The auction will be for 1800 MHz band not 2100 MHz 3G Band. The 3G auction is expected to happen in FY 2014-15 and 2-3 more licenses will be up for auction. Don’t hope for Aircel and Docomo until unless they start getting some profits.

      Now Aircel has also reduced data in 98 pack to 1GB only wherever it is operating and booster packs are also made costly. Check site. They have finally understand that cheap offerings can get you customers but not the revenues that can turn into profits and help expand network. Aircel is looking to return BWA or so called 4G spectrum to get some cash. This is the time they should stop the cheaper services mantra and offer 25-40% extra than competitors but not 100 or 200% like they were doing if they really want o stay as a Pan-India operator. I’ve a news that Aircel will comeback to circles where it stopped services when situations turns good for them and that’s why they have not removed the infrastructure they installed in those circles where services are stopped.

      Once they have cash n hand they will expand the 2G as well as 3G network.

      • Duane Anthony Bayliss September 10, 2013 1:14 pm

        @ Saurabh – its difficult to say: once a customer has had to leave a network (due to shutdown of services) what would draw him/her back (in event of a re-start of services)?

        >> I’ve a news that Aircel will comeback to circles where it stopped services when situations turns good for them and that’s why they have not removed the infrastructure they installed in those circles where services are stopped.

        • Saurabh September 10, 2013 4:28 pm

          @DB, The reason for their failure in my circle was unavailability of their own network and their ti-eup with Docomo whose network was also not present everywhere. If they have had tie-up with Idea or Vodafone whose network is omnipresent, their user base would have been standing at 25 Lakh+ which never crossed 1 million. Beside this people were unaware whether a company called Aircel is also operating. They failed to advertise. I know all this happened because of the cash crunch but if they had promoted their brand, people would have come to them. Aircel had one of the cheapest voice/data/sms tariffs even then they didn’t manage to get users because of network. Those who used it still want it back. So if they do decide to come back, they need to work out on installing their own network or they ready network first and after that promote their brand.

    • Esmail September 10, 2013 2:45 pm

      The only way Aircel and Docomo could get 3G license in Mumbai in this upcoming auction is if they bid for 900 MHz band and since the new spectrum is technology neutral and comes with unified license they could use that to offer 3G services since it is one of the 4 bands used to deploy 3G globally 850/900/1900/2100 but so far India has seen 3G only on 2100MHz band. But this is a very unlikely thing to happen so don’t get your hopes up, mostly Vodafone will retain its 900MHz spectrum, though I’m doubtful about Loop mobile whether they could afford to invest at this point on spectrum.

      • Rama September 10, 2013 8:30 pm

        There is no chance any operator is gonna use 3g at 900 mhz in india atleast this is because if you consider local manufacturers like micromax karbonn lava they support only 2100 mhz and 1900 mhz for 3g on their smartphones and even top tier manufacturers have different models specifically for 3g and most of the models which ship in india dont have 900 mhz support for WCDMA so this would leave the gsm operator at a situation similar to CDMA operators

  • pushkar sinha September 10, 2013 8:05 am

    MTS WILL TAKE PART IN THE COMING AUCTION . IS IT TRUE?

  • S.Sudhakar September 10, 2013 6:19 am

    No news about Tamilnadu.

    Central government :
    Surely you will face only 49-O from us in the election. Wait and see. You shameless people.

    • Saurabh September 10, 2013 10:35 am

      What kind of person you are? 1. You don’t understand. 2. You don’t want to understand.

      They have reduced prices everywhere i.e for all circles. The articles around the web showing about metros only as auction for 900 MHz spectrum is going to happen in these circles as licenses are coming up for renewal starting next year. There aren’t names of other states too but people are not over-reacting like you. The 900MHz band spectrum for T.N circle will be up for renewals in 2017-2020. Till then only 1800 Mhz band will be auctioned for your circle. When article says per MHz pan-India spectrum cost is reduced, you can yourself understand that it is also reduced for your circle too.

      During November auction price for every MHz of spectrum in T.N was Rs.244.80 crore and now it is Rs.124.80 crores or as 200X1 KHz block will be up for auction it comes out to be Rs.24.96 crores per block of 200KHz. If in next auction, any operator want to come to T.N they will if they find the price of Rs.124.80 crores per MHz as cheap.

      • S.Sudhakar September 10, 2013 7:12 pm

        I agree that Videocon’s coverage was poor in Tamilnadu. But we lost such a good / cheap operator Videocon because of dirty / shameless government policies. You do not know about the call rates of Videocon when it was there in Tamilnadu. Uninor also provided affordable tariffs (only GPRS packs were senseless – 1 GB for 30 days at 33 MB per day).

        • siva chennai September 10, 2013 9:02 pm

          yeah….Tamilnadu lost new operators like Uninor , Videocon ,loop mob,etisalat….because of this central govt….

        • Saurabh September 11, 2013 8:54 am

          @S. Sudhakar, I’m aware of Videocon’s plans when they were operating in TN. Videocon was available in Haryana and it is available now since it retained license for our circle also. Since they paid huge sum i.e over Rs.184 crores for Haryana, plan now are more costly then before. The local V2V plan used to cost only Rs.59 for 2500 minutes. Now it costs Rs.249 for 2500 minutes but includes STD also to Videocon numbers. Similarly calls to landline costs 1.8p/s or Rs.1.08/min even when booster pack is active.

          What I’m trying to say is, they were able to provide cheaper tariffs because they had license at throwaway prices but now they can’t afford to provide things cheaper. When AVoID increase charges, they also do the same without going into fact that their network is no way near to them. Even if they had retained license for your circle T.N, you won’t be able to get cheaper tarifs because of the huge license cost which was over Rs.1,042 crore. Videocon is moving with a strategy that if others charge Rs.1, they will keep price @Rs.0.75 i.e 25% less. Now they have reduced data in all GPRS packs again and 96 plan offers 1.2GB only which used to be either 4GB or even unlimited. But this reduction does make sense as for survival they need money which they have spent on retaining license.

          They still have many good plans like Rs.199 which offers 4GB Day and unlimited night (12-8AM) Internet and Rs.199 talktime but still network is a concern. Usres know that they don;t have network in 6-7 circles only i.e why avoiding it or only those taking it who don’t roam often. It has been 9-10 months since they retained license and their user base in Haryana is still struggling to get to 1 million mark. In last 8-9 months they have added only 2-2.5 lakh users which not gonna help them. They are doing the same mistake Aircel did by tying up with Tata Docomo for network which don’t have rural presence. So 30-35% of area here don’t have their signal at all. Even in my town there are many places where they don;t have network and need BTS but company is not expanding and installing their own BTS.

          Whee i ask someone to take Videocon as their tariffs are cheap compared to others (even in areas where they have good signal), I often get a reply that what to do when we will go outside? Their less than a million users base tells the whole story that people don;t trust them and those who have it are low ARPU customers. I don;t know what future has for them but their present isn’t good at all. The things are the same like before.

    • sd September 10, 2013 12:03 pm

      “Surely you will face only 49-O from us in the election.”…….Since you vote for only for Tamil parties, no one at the centre gives a damn how you vote.

    • Duane Anthony Bayliss September 10, 2013 1:15 pm

      @ SUDHAKAR – let TIMES NOW / NDTV decide that, on ELECTION DAY!
      For now lets TALK TELECOM !! … er rather TELECOM TALK !!

    • Anoop John September 10, 2013 4:14 pm

      @S.Sudhakar, I have seen somany times that, u r talking abt 49-O. Have u understatd that if you vote under provision 49-O also, there is no impact on the election result?. The who got max vote will win.

      • S.Sudhakar September 10, 2013 7:55 pm

        If we boycott our vote, these shameless political parties will cast their vote in our name !!!. You know that this is happening in India. So if I cast under 49-O, no one can change my vote.

        • siva chennai September 10, 2013 8:58 pm

          your vote your rights…

  • SS September 9, 2013 10:14 pm

    If approved, it will be a good news for established biggies.

    Just goes to show the influence of AVOID in telecom sector. Their dadagiri rules!! I like it.

    • Biswadeep September 10, 2013 8:55 am

      +1…
      Shows their influence on the government as well as the market. They wont allow newer players to survive !

      • Duane Anthony Bayliss September 10, 2013 1:16 pm

        @ BISWADIP – are there any “new” players left? its all over … last operator launched in 2009 IMHO (in my humble opinion).

    • Saurabh September 10, 2013 10:46 am

      Not the influence but the situation. Operators are right with their stance that base price should be kept low and allow market forces to shoot it up to extent they want to. Having such a exorbitant entry levels doesn’t make any sense. Remember, the base price for 3G spectrum was Rs. 3,500 cores only for 5MHz of spectrum on Pan-India basis but market forces shoot it up to Rs.16,720 cores.

      Last time TRAI didn’t worked out well and set the base price looking at the developed countries where users can spend more and cost can be recovered easily. We are a developing country and price should be according to that. Now it is 2X of 3G spectrum which is even though not cheap yet looks good as compared to 18,000 crores set first time.

      Uninor, MTS and Videocon was forced to retain spectrum in auctions held before as they were to lose operations which would have hot them hard as stopping services now and again starting from zero is hard. So they were not in a situation to wait for better prices. This is not the case with operators got license before 2008. Even Idea has paid the higher price in Nov, 2012 auctions for circles where they lost licenses.

      I hope Govt adjusts the extra money paid by the operators in 2012 against the one they bid in future for the sake of level playing field.

      • Rama September 10, 2013 8:38 pm

        Hey could you elaborate on what is meant by 8mhz of 900 mhz spectrum

    • S.Sudhakar35@gmail.com September 10, 2013 7:57 pm

      New mobile networks must start in India based on GSM 850 MHz and GSM 1900 MHz.

  • Kaushik Roy September 9, 2013 10:06 pm

    Now again we will see low call rate operators like telenor entering india
    but the quality should not be comprised and trai should penalise heavily operators with low coverage
    aircel/loop/docomo should leave india as soon as new operators about to start business and must sell them to get a good price rather than continuing with losses

    • raju September 10, 2013 12:32 pm

      why shud aircel/docomo sell their spectrum? Instead of leaving india,they shud concentrate only on the circles that they can handle (may be 6-7) They shudn’t be greedy to become pan-india operators.

  • Adil September 9, 2013 9:25 pm

    waiting for the day of auction…

  • Mithun September 9, 2013 9:24 pm

    This time vodafone will easy get its license renewed for kolkata circle.whats say?

    • Duane Anthony Bayliss September 10, 2013 1:20 pm

      @ Mithun – hopefully yes! and for Mumbai and Delhi too!

      • Rhishav September 10, 2013 7:26 pm

        I am more concerned about airtel. Will it be able to retain its license in Kolkata and Delhi?

  • Shashee September 9, 2013 9:18 pm

    @chavi when will next auction for new players.???

    • Chhavi September 9, 2013 10:02 pm

      Scheduled for 2014 !

      • Krish September 11, 2013 4:04 pm

        Coz of TRAI politics, MTS is only the player became biggest fool by paying that much of huge money for CDMA spectrum where there was no compititor also.