The Telecom Regulatory Authority of India (TRAI) has recommended (pdf) an increase in the reserve price for CDMA spectrum to Rs 3,104 crore per MHz, up 15.6% from Rs 2,685 crore per MHz reserve price recommended in February this year.

The new reserve price is 70.5% higher than the Rs 1,820 crore per MHz reserve price set for the 800 MHz band, during the March 2013 auctions. Sistema Shyam Teleservices, which operates in India as MTS India, was the only bidder in 800 MHz band and had secured spectrum in eight telecom circles for Rs 3,639 crore.

This recommendation is based on the feedback provided by the Department of Telecommunications (DoT) on TRAI’s February recommendations.

TRAI recommendations

TRAI recommendations

BSNL & MTNL CDMA spectrum issue: TRAI has stuck to its earlier recommendation that DoT should take back 50% of BSNL’s spectrum in the 800 MHz band and that the telco should be allowed to retain only one block of spectrum in 800MHz band in all licensed service areas (LSAs) except for Assam, North-East and Jammu and Kashmir, where it is the only operator offering CDMA services. Similarly, TRAI has once again recommended DoT to take back the entire CDMA spectrum of MTNL in the country.

TRAI mentions that the combined CDMA subscriber base of BSNL & MTNL is 2% of the total CDMA subscribers, even though they hold 24% of the total spectrum assigned in the 800 MHz band. On average, they are serving around 13,500 subscribers per MHz, while private telecom operators are serving around 2.24 lakh subscribers per MHz in this band.

Earlier, both BSNL & MTNL had opposed this proposal. A BSNL director had told The Economic Times that the telco had already invested Rs 600 crore in a countrywide CDMA network and in case it is asked to return the spectrum this investment will go to waste, plus it would have to spend an additional Rs 250-300 crore in order to migrate CDMA customers to other frequencies, which would lead to a drop in service quality. MTNL had also ruled out returning its CDMA spectrum, since it apparently wanted to use it to either deploy LTE services or share it with other operators to generate revenue.

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