The Telecom Commission has favoured auctioning all available spectrum at the reserve price suggested by the Telecom Regulatory Authority of India (TRAI), according to an official who did not wish to be named. A sale at such price could fetch the government about Rs.5.36 lakh crore.
The Telecom Commission was also of the view that companies winning spectrum in higher frequency bands, above 1GHz (1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz), should make 50 per cent upfront payment instead of 33 per cent under the current rules, the telecom ministry official said.
The balance will be paid in 10 years after a two-year moratorium. “For spectrum purchased in the below 1GHz band (700 MHz, 800 MHz and 900 MHz), companies would require to pay 25 per cent as upfront payment and the rest over 10 years after two years of moratorium.
There has been no change in the earlier practice of government,” the official said. The proposal will now be sent to the Cabinet for approval in the next few days.
The auction of airwaves, which is to be held in July this year, will include 700 MHz spectrum for the first time in the country at a pan-India reserve price of about Rs.11,500 crore per MHz.
The 700 MHz spectrum is considered to be the most suitable for offering high speed broadband services.
However, the operators had asked the sale to be held back till the device ecosystem is put in place.
The cost of delivering mobile services in 700 MHz band is also approximately 70 per cent cheaper than 2100 MHz band (used for 3G services). For 1,800 MHz spectrum, widely used for offering voice services, the telecom regulator had recommended the reserve price of Rs.2,873 crore. For spectrum in 900 MHz band, 800 MHz band, 2100 MHz band and 2300 MHz band, the reserve price was kept at Rs.3,341 crore, Rs.5,819 crore, Rs.3,746 crore and Rs.817 crore, respectively. The regulator has recommended that the reserve price for 2500 MHz spectrum, which is also on the offer for the first time, to be kept equal to that of 2300 MHz spectrum.
Meanwhile, the panel deferred the decision on annual spectrum charges.
“Telecom Commission will take a decision after the report of Technical Committee is submitted and taking legal opinion of the Attorney General on the SUC charges,” the official said.
