Trai sticks to recommendations on 2G, 4G spectrum auction

New Delhi: Despite strong criticism, India’s telecom regulator has largely stuck to its recommendations on the auction of 2G and 4G spectrum.

In its latest suggestions to the department of telecommunications (DoT), submitted late Sunday, the regulator left its calculations for the reserve price of the spectrum unchanged from its original proposals made last month.

The telecom regulatory authority of India (Trai), in fact, raised the proposed usage charges for the auctioned spectrum from 1% to 3%.

Spectrum in the 2G and 4G radio bands are up for auction in the next three years.

Trai also suggested that the government can have the option of reducing the reserve price to 1.3x from the earlier suggested 2x in the 1,800 MHz band only in telecom areas where there is spectrum available.

This will translate to a minimum payout of Rs 23,500 crore for 5 MHz of spectrum, rather than the earlier Rs 36,000 crore.

Trai has also suggested a second block of 5 MHz air waves be put up for auction if there is adequate spectrum available after being reserved for refarming.

Trai has stuck to its refarming suggestions.

The suggestions will now be looked into by internal committees of DoT before being sent for approval to the telecom commission, the government’s highest telecom policy decision-making body.

After the commission’s approval, the recommendations will need the approval of an empowered group of ministers.

The latest recommendations came on the day J.S. Sarma retired as Trai chairman.

The original recommendations came in for severe criticism from across the industry with some operators and analysts saying there would be no business viability left for the Indian telecom sector if Trai’s proposals were implemented.

The operators had said tariffs could double if the government accepted the proposals.

Trai reiterated its earlier recommendations to take back spectrum in the 900 MHz band allocated to the older operators, including Bharti Airtel Ltd and Vodafone, and replace it with spectrum in the 1,800MHz band.

This would mean a significant loss of competitive advantage that the older operators had, due to entering the sector early, as well as a hefty payout.

Trai also suggested this refarming be applied to dual technology operators, including Reliance Communications Ltd and Tata Teleservices Ltd.

PTI contributed to this report.

shauvik.g@livemint.com