The Telecom Regulatory Authority of India (Trai) has reiterated its views on auctioning spectrum in the 700 MHz band, suggesting the Department of Telecommunications (DoT) to put the entire available spectrum under the hammer. The Telecom Commission on March 28 had referenced back the regulator’s recommendations seeking clarifications on some issues.
The DoT had asked Trai to reconsider its recommendation on auctioning the entire available quantity of 70 MHz spectrum 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 on this suggesting that the all the spectrum that is available in the frequency should be put to auction, which is planned in July.
“The Authority is of the view that holding back some of the spectrum in 700 MHz from this auction and selling it after a gap of certain period of time from now would lead to non-utilisation of this scarce natural resource for that period, though it has the potential to be reused and reallocated,” Trai said.
“Even if it is assumed that greater revenue can be generated by auctioning a part of spectrum in 700 MHz and in future, deferring the revenue receipts now may not be of economic prudence keeping in view the impact of telecom services on the other sectors and overall GDP growth,” the regulator added.
The Telecom Commission had also asked Trai to explain the rationale behind setting the base price of the 700 MHz spectrum at Rs 11,485 crore per MHz. The recommended reserve price was four times the reserve price of spectrum in the 1800 MHz band even though the propagation characteristics of 700 MHz are more similar to 800 MHz and 900 MHz bands than 1800 MHz.
Trai said that despite the 700 MHz band being technically similar to 800 MHz and 900 MHz bands, it was more likely that telcos would use the spectrum in the frequency to deploy 4G LTE network. As the 1800 MHz band is also used for deploying 4G in the country, Trai said it decided to benchmark the reserve price of 700 MHz band in line with the 1800 MHz frequency.
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