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Telecom Commission Recommends Auction Of 10MHz Spectrum; GSMA Wants Lower Base Prices

The Telecom Commission, the Indian government’s highest decision making body on telecom matters, has recommended that at least 10 Mhz of spectrum should be sold through auctions, in contrast with the TRAI’s recommendations of recommended only auctioning 5 Mhz spectrum, saying that additional spectrum should be made available only if spectrum is left after reserving it for future need of refarming, according to a PTI report (via The Hindu). The commission said that the auction will take place in 8 blocks of 1.25 Mhz each, out of which new telecom companies will need to buy minimum 4 blocks (5 Mhz) and existing players can buy up to two blocks (2.5 Mhz). If a new player was not able to get 4 blocks, the government would provide additional spectrum in blocks of 1.25 Mhz each, according to the report.

However, the commission has not taken a final decision on spectrum pricing and has asked the TRAI to carry out an impact analysis of the reserve price of spectrum on consumers and operators.

According to Hindustan Times, R Chandrashekhar, chairman and secretary, Telecom Commission, Department of Telecom, said that the Commission hopes to work on finalising its proposition to the Empowered Group of Ministers by end of the month, after the TRAI comes up with a revised analysis.

GSMA Wants Reserve Price Lowered

The GSMA welcomed the Telecom Commission’s decision to release more spectrum in each circle in the 1800MHz band, and said that this decision was a first step in the right direction for the Indian people and economy, but was insufficient to meet the rising demand for mobile services over the long term and still at a lower level than what was currently available.

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The body also expressed concern over the Telecom Commission’s not taking a decision on reducing the reserve price levels recommended by the TRAI. It said that if the prices remain the same, they present a major disincentive to future investment in India and will threaten the country’s leadership in mobile technology. The GSMA also said that spectrum usage charges should be kept at a minimum.

What The TRAI Had Recommended

The TRAI had recommended that auction of spectrum should be conducted in multiple rounds. It had 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 had 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 proposed a limit of 5MHz in each of the 22 circle.

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