Telecom Commission suggests hiking of spectrum prices

The Telecom Commission has recommended hiking reserve price for pan-India mobile spectrum by 15 per cent more than Telecom Regulatory Authority of India's (TRAI) suggestions, as it did not find the sector regulator's recommendations on spectrum pricing entirely suitable. 

The 15-per cent hike is for spectrum bands 900 MHz and 1800 MHz, both of which are used to provide 2G services.

This gains importance as the Department of Telecommunications (DoT) is looking at conducting auctions by January. The telecom licencor expects to rake in minimum revenues of about Rs 11,000 crore from the spectrum auctions.

The Telecom Commission, DoT's highest decision-making body also suggested that spectrum prices should be higher by 25 per cent in key circles such as like Delhi and Mumbai.

The recommended rates were still lower than the reserve prices fixed for previous auction.

The proposal now has to be approved by the empowered Group of Ministers (eGOM),'' Telecom Secretary M F Farooqui said.

The hike in 1800 MHz band is for metros and A category circles such as Delhi, Mumbai, Kolkata, Andhra Pradesh, Gujarat, Karnataka, Maharashtra and Tamil Nadu. There is no change in price of the 1800 MHz airwaves in the remaining circles.

Following the hike, the new base price for 1800 MHz in Delhi would be Rs218.90 crore per MHz, Mumbai Rs206.74 crore and Kolkata Rs73.13 crore, higher than TRAI's recommendation of Rs175.12 crore for Delhi, Rs165.39 crore for Mumbai and Rs58.50 crore for Kolkata as the reserve price.

The base price per MHz for 900 MHz spectrum in Delhi would be Rs359.65 crore, Mumbai at Rs327.50 crore and Rs125.27 crore for Kolkata. TRAI had recommended Rs287.72 crore for Delhi, Rs262 crore for Mumbai and Rs100.22 crore for Kolkata.

TRAI had earlier dismissed the need for any fresh auction in 800 MHz band. It had also recommended slashing the base price of 1800 MHz band by a 37-per cent from the price in the previous auction.

The commission has also finalised the mergers and acquisition policy, which allows combined telecom operators to hold up to 50 per cent market share in each circle.