Telecom Commission finalises Rs 3700-cr base price for 2100MHz in coming spectrum auction

By January 19th, 2015 AT 5:24 PM

Inter-ministerial panel Telecom Commission (TC) on Monday has finalised a base price of Rs 3,700 crore for each MHz of 2,100-MHz spectrum.The spectrum auctions would be auctioned in February 25. The next round of auctions for spectrum is compulsory for mobile operators – Airtel, Vodafone, Idea and Reliance Communication – as some of their licences are set to expire in 2015-16.

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TC also decided that only five MHz of spectrum in the 2,100-MHz band will be put up for auctioning in the coming round. This should fetch the government a total of Rs 18,500 crore at today meeting. Few days ago, Telecom regulator, Telecom Regulatory Authority of India (TRAI) has returned the clarifications sought by the Telecom Commission (TC) and kept the base price of 3G spectrum unchanged at Rs 2,720 crore per megahertz stating all spectrum in 2100 MHz band.

In its reply, TRAI said that it stands by it pricing 3G spectrum at Rs 2,720 crore per megahertz . A week ago, The Telecom Commission (TC) had referred the regulator’s recommendations pertaining to the pricing of spectrum in the 2100 MHz band, for a review.

The final reserve price is 36 per cent higher than the Rs 2,720 crore recommended by the TRAI. With this , Narendra Modi Cabinet is expected to meet this week and take a final call on this matter. Besides 2,100-MHz, spectrum in the 800, 900 and 1,800-MHz will also be put on the block in February.

Going ahead, the government of India estimated revenues will be more than Rs 80,000 (Rs 64840 cr (excluding 2100 MHz spectrum) of which Rs 16000 cr) from 5 MHz of 3G spectrum in the 2,100 MHz band along with 2G bands (800, 900 and 1,800 MHz) in the auctions planned Recently, TC had rejected the TRAI’s recommendation on the 2,100-MHz base price and referred it back to the regulator. But Trai last week refused to change its suggested price and sent it back to the department of telecommunications.

Also read : Spectrum Auction to start from February 25 for 800, 900, 1800 and 2100 MHz

The 3G spectrum in 2010 had attracted bids worth Rs 16,750.58 crore for a block of 5 Mhz frequencies on pan-India basis which amounts to about Rs 3,350 crore per Mhz. The recommended base price is about four times higher on per megahertz basis when compared to reserve price of Rs 3,500 crore for 5 Mhz fixed by the government for last 3G auction.

In early this month, the Union Cabinet, chaired by the Prime Minister Narendra Modi has approved the proposal of the Department of Telecom to proceed with auction in 800, 900 and 1800 MHz bands. Lastly, the quantum of spectrum to be put to auction is 103.75 MHz in 800 MHz band in all service areas, 177.8 MHz in 17 LSAs in 900 MHz band and 99.2 MHz in 15 LSAs in 1800 MHz band. Thus a total of 380.75 MHz in 800,900 & 1800 MHz is being put to auction.

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ranganathan Rajagopalan Recent comment authors
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ranganathan Rajagopalan
ranganathan Rajagopalan

800 Mhz is good for long range and penetration

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