India's telecom regulator, Telecom Regulatory Authority of India (Trai), has proposed a 10-per cent higher starting price for the 1800 MHz spectrum (2G) to be auctioned in February next year.
The price is higher compared with the winning bid of this February's auction.
Trai, which is slated to auction the spectrum across 20 circles, has priced the airwaves at Rs2,138 crore per MHz for the 1800 MHz band. The government will not conduct spectrum auction in Maharashtra and West Bengal circles due to non-availability of full spectrum, Trai said.
For the superior 900 MHz, it has set a price of Rs3,004 crore. The government is planning to auction the bandwidth across 18 circles only in February as the premium band is not available in Jammu and Kashmir, Delhi, Mumbai and Kolkata circles.
The prices are discovered based on the estimated higher average data usage as compared with the earlier period. In the February 2014 auction, government had received bids valued at Rs2,270.4 crore per MHz in 1800 band.
In the 900 MHz, about 184 MHz of spectrum is likely to be auctioned. In 1800 MHz, government has proposed to auction 104 MHz which included spectrum held by licences that are expiring in 2015-16 and unsold in February auction.
"In the 900 MHz band, only the spectrum held by them is available for the auction. These operators will have to win back this spectrum to ensure business continuity in a licence service area and if they don't, it places the large investment made in the LSAs in jeopardy," Trai said.
In December 2015, seven licences of Idea Cellular and Reliance Communications, four licences of Bharti Airtel and six licences of Vodafone are scheduled to complete their 20-year term. The companies have to renew the licences.
COAI welcomes recommendations
The Cellular Operators' Association of India (COAI) has welcomed TRAI's recommendations.
''It is clearly beneficial to the consumers and the future developments for the mobility industry in the country. COAI is gratified that TRAI has acknowledged the primary necessity of adequate quantum of spectrum for the development of the communications services and effective deployment of mobile broadband technologies in India,'' it said in a statement.
TRAI's recommendation to take back 1.2 MHz spectrum in the 900 MHz band from BSNL would add to the available spectrum for auctions. The addition of the entire 60 MHz in the 2100 MHz band for commercial use will further boost the spectrum capacity on offer. This will be critical in achieving the broadband aspirations of the government, the GSM operators' body said.