TRAI Cuts Spectrum Base Price; Brings Cheer to Incumbent Players

By September 9th, 2013 AT 9:11 PM

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.

Chhavi is a social media enthusiast and telecom technologies admirer. Based out of New Delhi, she is a corporate communication and marketing professional by day and writer by night. If she is not busy with Telecom, you can find her reading management books.

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[…] TRAI has said in its recommendations 900 Mhz band (2G /GSM spectrum) that there is no demand for the CDMA spectrum, except from SSTL, as was seen in the last auction […]

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@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… Read more »

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