2G auction: TRAI for 10% hike in 1800 MHz base price

Telecom regulator TRAI on Wednesday recommended a hike of around 10 per cent in the price of 2G spectrum in the 1800 MHz band, in 20 circles, at ₹2,138 crore per MHz, during the next round of auctions.

The regulator said that due to the paucity of airwaves in Maharashtra and West Bengal in the 1800 MHz band, auctions should not be held in these states.

The hike had been recommended due to the increase in data usage by consumers, it said. However, the suggested price per MHz is lower than in the February auction when the Government had received bids valued at ₹2,270.4 crore per MHz in the 1800 Mhz band.

The regulator has also recommended that the DoT take a fresh look at the proposed implementation of the extended GSM (E-GSM)s band.

Some industry members and analysts said the base price hike will help broaden connectivity.

However, Ashok Sud, Secretary-General of the Association of Unified Service Providers of India, said: “We are disappointed. We thought our suggestions (on the pricing of 1,800 MHz spectrum) were more reasonable.” The body had suggested a price of 80 per cent of the last discovered price (last auction prices) for valuing the spectrum.

“We are also unhappy about the decision to relook at E-GSM spectrum (an extension of the GSM-900 frequency),” he added.

TRAI has also suggested a price of ₹3,004 crore per MHz for the 900 MHz band, in which the mobile signal covered is about twice that of the 1800 MHz band.

The said amount per band will be applicable only in 18 of 22 circles as spectrum in this band is not available in J&K, Delhi, Mumbai and Kolkata.

“In the 900 MHz band, spectrum becoming available because of ‘expiry of licences’ (in 2015-16) is the only spectrum that can be put to auction. The amount of spectrum held by these licensees in the 900 MHz band is 184 MHz,” the TRAI statement said. Operators holding spectrum in the 900 MHz band include Airtel, Vodafone, Idea and Reliance Communications, whose licences expire in 2015-16.

The telecom regulator has said that a dialogue needs to be held at the level of the Finance Communications, IT and Defence ministries to ensure additional spectrum for commercial use.

“The Authority is also of the view that the auction should be carried out only after a clear roadmap is available for vacating spectrum in 2100 MHz band from Defence and in 900 MHz band from BSNL,” it said.