India’s telecom regulator, Regulatory Authority of India (TRAI) has recommended a reserve price of Rs.3,104 crore per megahertz for CDMA or 800 MHz band, which is 15 percent higher than the rate it had proposed in February.
In its February recommendation, the TRAI had proposed a reserve price of Rs. 2,685 crore per megahertz for 800 Mhz.
For this, the Narendra Modi government, in its budget estimates for the current financial year, 2014-15, has projected minimum revenue of Rs 9,355 crore from auction of 800 MHz (used by operators providing mobile services base on CDMA technology standard) as well as the 900 MHz and 1800 MHz bands.
In the meantime, the four licences of Bharti Airtel, seven each of Idea Cellular and Reliance Telecom and six of Vodafone will complete their 20-year term and would require renewal in December 2015. The companies can renew their licences by paying a fixed fee but for continuing mobile and other wireless services they will need to buy spectrum afresh through auction at market determined rates.
The 10-day long auction held in February this year gave the government over Rs 61,162 crore, far exceeding the target where eight telecom firms had bid for 900 MHz and 1800 MHz bands.
As we know, close to 118.75 MHz spectrum in the 800MHz band is available due to the Supreme Court of India (SCI) quashing 122 unified access service licences issued in January 2008 by former telecom minister A Raja.
The SCI had also directed TRAI to make fresh recommendations for the telecom spectrum auction route in future, within four months.
But it took more than Six years and finally it is going to happen by early next year.
Who lost after SCI order
The companies whose licences have been scrapped, apart from Uninor (a joint venture between Norway’s Telenor and Unitech Group), and Sistema Shyam (it offers services under the MTS brand name through a JV between Russia’s Sistema and Shyam Telecom) include S Tel, Videocon, Idea Cellular, Tata Teleservices, Loop Telecom, Etisalat DB (a JV between the UAE’s Etisalat and Swan Telecom)