Telecom panel gives nod to Trai recommendations

Favours auction of all available spectrum across frequencies at reserve prices suggested by the regulator, including that in the contentious 700 MHz.

By: ENS Economic Bureau | New Delhi | Published:May 1, 2016 1:17 am
Citing Telenor as an example, the AG said that if Telenor can come out with a scheme to give free calls for every call drop, so could other telcos. Trai reiterated its view suggesting that the all the spectrum available in the frequency should be put to auction, which is planned in July.

The Telecom Commission has granted its approval to auctioning of all available spectrum across all frequencies at reserve prices as recommended by the Telecom Regulatory Authority of India (Trai), including that in the contentious 700 MHz band, a senior government official said on Saturday.

Auction of the 700 MHz band was under debate after the industry had suggested that only a part of the available spectrum was put under the hammer, but the sectoral regulator favoured auctioning the entire slot of 35 MHz of paired spectrum. The Telecom Commission on March 28 had referenced back the regulator’s recommendations seeking clarifications on some issues.

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The Department of Telecom (DoT) had asked Trai to reconsider its recommendation on auctioning the entire available quantity in the 700 MHz band. In its clarifications, Trai said the government was exploring option to auction 40 MHz in the first phase and 30 MHz in the second phase.

Trai reiterated its view suggesting that the all the spectrum available in the frequency should be put to auction, which is planned in July.

The government official said that the commission was of the view that all the 35 MHz paired spectrum in the 700 MHz band should be auctioned at a base price of Rs 57,500 crore per block. One block is equal to 5 MHz of the natural resource.

Another proposal that the panel cleared was change in payment terms for spectrum won in auction. Even as the conditions for sub-1 GHz bands — 700 MHz, 800 MHz, and 900 MHz — were unchanged, the government increased the upfront payment for spectrum in 1800 MHz, 2100 MHz, 2300 MHz, and 2500 MHz bands.

In the auctions held till date, telecom companies paid an upfront amount of 33 per cent with the rest payable in instalments, whereas according to the new policy, they would have to pay 50 per cent of the winning amount up front.

“Those who buy spectrum in bands above 1 GHz, have the capacity to borrow and pay,” the official said, explaining the rationale behind the decision. The official also said that the government expected harmonisation of defence spectrum in time for the July auctions that would release up to 200 MHz spectrum for use by mobile companies.

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