TRAI proposes 10 percent hike in spectrum auction reserve price

New Delhi The Telecom Regulatory Authority of India TRAI Wednesday recommended around 10 percent hike in the reserve price for 1800 MHz band spectrum auction compared to the last winning price in the February 2014 saleIn the 900 MHz band only the spectrum held by them is available for the auction These licensees will have to win back this spectrum to ensure business continuity in a licence service area LSA if they dont it places the large investment made in the LSAs in jeopardy the TRAI saidIt has set a price of Rs3004 crore per mega hertz for bandwidth to be auctioned in 18 service areas for the more efficient 900 Mhz band and Rs2138 crore per mega hertz for the 1800 Mhz bandThe auction is expected to take place in February 2015In the 1800 MHz band 20 circles are going for auction while in the 900 Mhz band 18 circles will be up for saleTRAI said 12 MHz spectrum in 900 MHz band should be taken back from BSNL from all the LSAs where licences expire in 201516 except in Punjab In lieu BSNL should be assigned 12 MHz in the 1800 MHz band only in those LSAs where its spectrum holding in that band is less than 38 MHz in this band that is Gujarat Rajasthan and West BengalThe Cellular Operators Association of India COAI the GSM body welcomed the recommendations for the forthcoming auctions and said It is clearly beneficial to the consumers and the future developments for the mobility industry in the countryWe also appreciate the TRAIs acknowledgement of the need to conduct auctions in all available bands 800 MHz 900 MHz 1800 MHz and 2100 MHz simultaneously as this will allow adequate supply and will also give more flexibility and choice to the operators to structure their operations and business plans it saidIn December 2015 seven each licences of Idea Cellular and Reliance Communications four licences of Bharti Airtel and six licences of Vodafone are scheduled to complete their 20year term beyond which they require renewalThe recommendations said spectrum should be put to auction in a block size of 2x200 KHz in both the 900 and 1800 MHz bandsIn the 900 MHz band the bidders should be required to bid for a minimum of 2x36 MHz in those LSAs where spectrum being put to auction is 10 MHz or more and 2x24 MHz in the remaining LSAs they addedEarlier a TRAI consultation paper said that around 184 Mhz of spectrum in 900 MHz band and 104 MHz in 1800 Mhz band would be put up for auctionThe revenue target set by the government in 201415 Budget from spectrum auction is to the tune of Rs45471 croreIn 201314 the total receipts from auction were of the order of Rs4084706 croreIn February 2014 in a 10day auction of 900 MHz and 1800 MHz the government mopped up Rs61162 croreRegarding releasing of spectrum by the defence sector it said A dialogue needs to be held at the level of the finance minister the minister of communications and IT and the defence minister to ensure the availability of additional spectrum for commercial useUnused spectrum in the defence band should not be kept idle In the LSAs where spectrum assigned to defence in the 1800 MHz band is more than 20 MHz DoT should coordinate with defence for the vacation of spectrum held by defence in excess of 20 MHz it recommendedIt also mentioned that the government should announce the roadmap for the auction of spectrum in 700 MHz band This should be done before the conduct of the upcoming auctions in 900 1800 MHz bandRelease of 700 MHz will help in data growth in the country and in turn it will help in nationwide launch of fourth generation 4G technologyThe TRAI also recommended that the reserve price for North East LSA may be fixed at a discount of 50 percent on the recommended reserve price