‘…the reserve price appears to be based on certain assumptions, on which no clarity could emerge’

The sharp reduction of up to 62 per cent in the reserve price of spectrum recommended by the Telecom Regulatory Authority of India (TRAI) has been questioned by an internal panel of the Department of Telecommunications in its report submitted on Tuesday.

The internal panel of DoT, headed by Member (Technology), has suggested that “TRAI may be requested to reconsider the recommended reserve price...” for sharp reduction that the regulator has made for 2G spectrum to be put up for sale in the proposed third round of auction.

For 2G spectrum in 1800 Mhz band that was freed from cancellation of 122 telecom licences, TRAI has recommended about 37 per cent reduction in the base price and for 900 Mhz — premium 2G band — the regulator recommended a sharp reduction of about 62 per cent compared to the last reserve price.

TRAI had justified the reduction in spectrum price, and showed various scientific methodologies to arrive at the final price. The DoT panel for 1800 Mhz spectrum price, however, said “Deviation of various constants, co-efficient and variables to arrive at the reserve price under different approached appears to be based on certain assumptions, on which no clarity could emerge from recommendation.”

For 900 Mhz spectrum price in three service areas — Delhi, Mumbai and Kolkata — the panel said that recommendations were based on the price of 1800 Mhz band and “Moreover, various assumptions...have not been clearly spelt out in the recommendation. In this situation, the committee is not in position to arrive at a conclusion.”

The panel has suggested to seeking clarification from TRAI on the spectrum price as well as the price of 900 Mhz band spectrum in the rest of 19 service areas of the country as well. “The (internal DoT) panel has submitted its report. The panel was not for taking decision but to understand implication of TRAI’s recommendations. It has suggested taking reference for base price of 800 Mhz (CDMA) spectrum as their was a decision of EGoM on it,” a senior government official told PTI.

TRAI has suggested no auction for CDMA as of now since there was no demand for these airwaves in the last auction and only one company had participated in March 2013 auction.

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