Telecom companies have something to cheer about in the New Year with the regulator prescribing an 18 per cent reduction in the reserve price for 3G spectrum to be auctioned in February.
Compared with the price of ₹3,340 crore in 2010, the Telecom Regulatory Authority of India (TRAI) has now proposed a reserve price of ₹2,720 crore per MHz for pan-India spectrum.
The regulator has also told the Government that at least 15 MHz of spectrum in the 2100 MHz band should be put on the block, and each bidder should be allowed to acquire a maximum of 10 MHz. In the 2010 auction, operators could not buy more than 5 MHz in each circle. TRAI has, however, shortened the duration for completion of the rollout obligation to three years, compared with five years given to the companies that had won spectrum in 2010.
The regulator said that spectrum in the 2,100 MHz band should be put for sale simultaneously with that in other frequency bands, including the 900 MHz band and 1,800 MHz band.
Relief for industry TRAI’s recommendations are broadly in line with what the industry wants. The Department of Telecom (DoT) initially proposed to hold the auction in two phases and had earmarked only 5 MHz in the 2,100 MHz band.
Operators said that if the DoT accepts TRAI’s proposals, the bidding could be aggressive, which, in turn, will benefit the exchequer. Also, it will ease demand for the 900 MHz band, as operators keen to launch 3G services will also be able to bid for the 2,100 MHz band.
The recommendations will come as a huge relief for Idea Cellular, Vodafone and Airtel, whose licences in the 900 Mhz band are up for renewal in 2015.