The Telecom Regulatory Authority of India (TRAI) has recommended (pdf) a reduction in price for the pan-India 2G license to Rs 1,496 crore from Rs 2,379 per MHz in 1800 MHz band (around 37% decrease). This comes after TRAI's multiple attempt to auction 2G spectrum received a lukewarm response from the telecom operators as the base price was too high. Besides this, the reserve price for the 900 MHz spectrum for Delhi, Mumbai and Kolkata circle have been reduced by 60% to Rs 288 crore, Rs 262 crore, and Rs 100 crore respectively. Note that licenses 900 MHz band of leading telecom operators in such as Vodafone and Airtel are up for renewal next year. The 900 MHz band is more important as it can be used for 3G services. I expect carriers such as Idea, which did not buy 3G spectrum in key circles such as Mumbai to participate in the upcoming auction. Interestingly, the regulator did not mention about the 800 MHz band which is being used by CDMA players. TRAI has also recommended that telcos to be levied with 3% of adjusted gross revenue (AGR) as spectrum usage charge (SUC). Prior to this, charged 3-8 percent for the same. Telecom operators are also allowed to trade spectrum, even 3G spectrum, they bought albeit only through auctions. A transfer fee of one percent (1%) of the transactional amount or prescribed market price will be levied on the transferee, to be paid to the government. While the government has made recommendations about…
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