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TRAI Recommends Higher Base Auction Prices; Telcos Express Dismay

The Telecom Regulatory Authority of India-TRAI, has released recommendations (pdf) on the auction price of 2G spectrum in 22 circles, following the Supreme Court's verdict in the 2G spectrum allocation scam case, where it cancelled 122 licenses. The TRAI has recommended that auction of spectrum should be conducted in multiple rounds. It has also said that auctions shall be open to all incumbents holding CMTS/UAS licenses, however not to those that hold spectrum above the prescribed cap. The authority has recommended a reserve price of Rs 3,622.18 crore per MHz in 1800 MHz band, Rs 7244 crore in 800 and 900 MHz band, and Rs 14,000 crore in 700 MHz band for spectrum auctions. It has also recommended refarming of spectrum in the 900 MHz band, which is more cost effective for telcos. This translates into a reserve price of over Rs 18,100 crore for a block of 5 Mhz in the 1800 Mhz band for 2G spectrum, since the authority has proposed a limit of 5MHz in each of the 22 circle. The TRAI has also proposed re-farming of the 900 MHz band when licences of incumbent operators like Airtel, Vodafone and Idea come-up for renewal, asking them to surrender existing spectrum in the band and paying more for it. Interestingly, the TRAI has also asked the government to take back about 2 x 2.4MHz of spectrum from MTNL, since it doesn't have enough subscribers. In a rare show of unity, the COAI(Cellular Operators Association of India) and AUSPI(Association of…

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