Indian telecom regulator, Trai, has come out with its recommendations of the upcoming spectrum auction, which is likely to take place around May-June this year. It has given its recommendations on spectrum price for seven bands, including 700 MHz, 800 MHz, and 2500 MHz.
The regulator, for the very first time, has suggested auction of the super premium 700 MHz band, which is most suitable for 4G services. It has recommended a starting price of Rs 11,485 crore per Mhz pan-India base price for this band, which is the highest rate for any telecom frequency band.
The cost of delivering mobile services in 700 MHz band is roughly 70% lower than 2100 MHz band, which is being used for 3G services in India, according to the Trai recommendation paper. The regulator suggested a base price of Rs 2,873 crore per MHz for pan-India 1800 MHz frequency band - widely known as 2G spectrum. The price is 31% higher than the base price fixed by the government in March 2015 auction.
The regulator also recommended auction of all 3G spectrum available with the government at a marginally high rate of Rs 3,746 crore per Mhz pan-India against Rs 3,705 crore per MHz fixed by government for the same in March 2015 auction.
Trai also recommended a base price of Rs 5,829 crore per MHz for 800 MHz band, which is suitable for 4G services, and will be used by the exiusting holders such as Reliance Jio, Tata Teleservices, and RCom-Sistema combine. The base price for the 800 MHz band is almost 60% from base price of Rs 3,646 crore fixed in last auctions. The regulator has suggested auction of the 800 Mhz in 19 out of 22 telecom circles.