The telecom regulator has recommended slashing by up to 60% the base price of airwaves used by GSM operators that will be auctioned in the near future, bringing relief to most operators, including Bharti Airtel and Vodafone India.
The Telecom Regulatory Authority of India (Trai) also said spectrum trading should be allowed and recommended a flat spectrum usage charge, instead of one linked to the quantity of spectrum held. But it stood firm on the controversial spectrum re-farming proposal, saying operators holding spectrum in either 900 MHz or 1800 MHz bands should give up those airwaves on expiry of the licences and buy them back though auctions.
It didn’t offer any suggestions on the pricing of the 800 MHz band, used by CDMA operators, saying no auction is required due to the lack of demand. Specifically, the regulator has recommended Rs.1,496 crore per MHz as the floor price for pan-India spectrum in the 1800 MHz band, about 37% lower than the March auction price.
At the March auctions, four service areas, including the crucial circles of Delhi and Mumbai, had gone unsold, repeating the failure to attract bidders to those circles in November 2012 as well.
Trai’s latest proposals, which need to be cleared by the telecom department and then the cabinet, pegged Delhi’s base price at Rs.175 crore, down nearly 55% from its March levels, while suggesting a Rs.165 crore price for Mumbai, nearly 57% lower.
Rajan Matthews, director-general of Cellular Operators Association of India, said the GSM operators it represents are “relatively pleased” with valuation of the 1800 MHz spectrum. However, an official with a CDMA operator said Trai’s silence on 800 MHz pricing means the company doesn’t have clarity on how to expand organically.
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