TRAI recommends lower reserve prices for 2G spectrum

TRAI has today released recommendations on Valuation and Reserve Price of Spectrum, which includes a lower base price for telecom spectrum to be put on auction for operator service providers in India. As per the new recommendations, the regulator has decided on a pan-India reserve price of Rs 1,496 crores per MHz in the 1800MHz spectrum band. This will include the price of Rs 175 crores per MHz in 1800MHz band in Delhi as compared to Rs 388.11 per MHz in March 2013, and Rs 165 crores per MHz against the Rs 379.93 crores per MHz set in March for 1800MHz band in Mumbai. Similarly, the prices have been kept low for 1800MHz band in other states as well.

Also, in the 900MHz band, the reserve price for Delhi has been recommended at Rs 288 crores per MHz than Rs 360 crores per MHz earlier, Rs 262 crores per MHz for Mumbai as compared to Rs 327 crores last time, and Rs 100 crores per MHz instead of Rs 125 crores for Kolkata.

TRAI has recommended that in 1800MHz band the block size will be fixed at 2 x 200 KHz each with conditions like an existing licensee will have to bid for at least 3 blocks, while a new entrant will be required to bid for a minimum of 25 blocks. Similarly, in 900MHz spectrum band, the block size will be 2×1 MHz and a bidder will have to bid for at least 5 blocks.

Also, the recommendation papers include that there will be no reservation of spectrum for the renewal licensees in 900 or 1800MHz bands, and these licensees will be given priority over others in the bidding process. This would benefit carriers like Airtel, Idea and Vodafone. The authority has also recommended DoT to present the quantum of spectrum which will be available for bidding infuture after operators’ licenses for this spectrum expires. Additionally, DoT has also been recommended to provide timelines to the license holders whose licenses for using spectrum are due for renewal in 2015/16.