TRAI recommends PAN India 3G auction in Feb 2015 – can this be a game changer for Indian Telecom ?

As we all know, we are heading towards the biggest spectrum auction in the history of Indian telecom to be conducted next month. This auction will the first time when all frequency bands 800MHz, 900MHz, 1800MHz and 2100MHz will be auctioned in a single auction.

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Now in the latest development in the talks between the Telecom and Defence ministries we have been informed that yesterday the Defence ministry finally agreed to release 3 blocks of 5MHz each in the 2100MHz band in all 22 circles in exchange for equal quantum of spectrum in the 1900MHz band. TRAI has suggested DOT to auction this spectrum in Feb 2015 at a base price of Rs 2,720 cr per MHz of pan Indian 3G spectrum.

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What this means:

Currently we have 6 private operators and one PSU (MTNL+BSNL) that have 3G spectrum in India. None of the private operators hold Pan India 3G spectrum and are offering services on each other’s spectrum through ICRA with the permission of TDSAT. With 15MHz of fresh spectrum in 22 circles there will be a total of 330MHz of 3G spectrum put up for auctions which is sufficient for the entry of 3 new operators in each circle and enough for all 6 private operators to have Pan India footprint. Also the clarity on the availability of 2100MHz spectrum will prevent the bloodbath in the 900MHz bidding since that spectrum is suitable for both 2G and 3G services like Idea did for Delhi circle.