The Telecom Commission will present to the Group of Ministers the pricing formula suggested by both the TRAI and an internal DoT committee.
While the TRAI had proposed Rs 18,000 crore as the reserve price for 5 Mhz spectrum, the DoT panel had proposed a 17 per cent higher fee.
Two options
The Telecom Commission will also present two options for deciding the quantity of spectrum to be sold. A minimum of eight blocks each of 1.25 Mhz may be put up for auction in all service areas after reserving for re-farming. In addition, a provision may also be inserted to make available another three blocks of 1.25 Mhz to meet the requirement of new entrants.
The second option is to put all spectrum available on the block, which includes 55 Mhz spectrum to be vacated by the Defence, according to the Minutes of the Telecom Commission's meeting seen by
The Commission has noted that vacation of this spectrum is crucial for the auction. In any case, auction should be held in all areas where even partial spectrum is available currently with the condition that the balance will be allocated after the Defence vacates it.
The panel has observed that in case only partial spectrum is allocated to winning operators then the payment can be accepted in part initially.
The Commission has recommended that existing players will be allowed to win maximum of two blocks of 1.25 Mhz each while new players can bid for up to four blocks of 1.25 each. For CDMA operators, it has proposed to sell three blocks of 1.25 Mhz in the 800 Mhz band.
Meeting on June 5
The GoM is expected to meet on June 5 to take a view on these decisions by the Commission. Before that, the TRAI has been asked to give an analysis of its proposals on the industry, tariffs and Government revenue.
TRAI has also been told to look into the possibility of giving the spectrum for a 20-year period but with the option of paying upfront for 10 years and the balance will be based on market determined price at that time. The operators have, however, opposed this new plan on grounds that this needs to be put through the TRAI's consultation process.
On the issue of re-farming, the Commission has taken a view that it should be completed by May 2013 for GSM players as licences come up for renewal from 2014 onwards.
For CDMA players, the Commission has decided that the Department of Telecom should conduct an interference trial in the 800 Mhz band before re-farming is done. The Commission observed that since CDMA licences don't come up for renewal before 2017, this issue can be addressed by then.