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TRAI bats for 22% lower base price for 3G spectrum auction

MUMBAI: Telecom operators can breathe easy this year as the Telecom Regulatory Authority of India (TRAI) has recommended a base price of Rs 2,720 crore (Rs 27.20 billion) per megahertz for pan-India 3G spectrum, which is about 22 per cent lower than the previous auction.

In 2010, the government had auctioned 3G spectrum at pan-India floor price of Rs 3,500 crore per Mhz.

TRAI has also recommended that a further 15 Mhz should be put for auction by the Department of Telecom (DoT), which has to be obtained in exchange of spectrum that is with the Defence services.

DoT expects to get 5 Mhz of 3G spectrum (2100 Mhz band) from the Defence Ministry.

“The Authority recommends that the reserve price for 2100 MHz spectrum in each LSA (license service area) should be … Rs 2,720 crore. Furthermore, the 15 MHz of spectrum in the 2100 MHz spectrum being vacated by the Ministry of Defence, in lieu of spectrum in the 1900 MHz spectrum, should be auctioned in view of the in-principle agreement reached with MoD, even if it is not available immediately,” TRAI said.

TRAI wants DoT to ensure that the 2100 MHz spectrum which was earlier assigned to S-TEL in three service areas—Bihar, Orissa and Himachal Pradesh—is also put to auction.

DoT is expected to auction 2G frequencies in the 800 Mhz, 900 Mhz and 1800 Mhz bands in February.

It may be recalled that STel shut its business in India after the Supreme Court cancelled 122 licences in February 2012 in the 2G spectrum allocation case.

CAG had used the 2010 reserve price for 3G spectrum to estimate notional loss figure of Rs 1.76 lakh crore in 2G spectrum allocation case of 2008.