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TC asks DoT to re-examine key issues, suggests base price for 800, 900, 1800MHz bands

Inter ministerial panel Telecom Commission, in a recent meeting earlier this week, has decided that the Department of Telecommunications (DoT) should reexamine the issue of taking back spectrum from state-run Bharat Sanchar Nigam Ltd (BSNL) as the Telecom Regulatory Authority of India (Trai) had suggested.

The DoT had earlier rejected Trai’s suggestion to take back 1.25MHz of spectrum from BSNL in 900MHz band, and give similar quantum in 1800MHz band, but the DoT had said it would not be legally tenable. The Telecom Commission has asked the DoT to submit its decision to the panel before its next meeting.

The Telecom Commission has also noted in its meeting that the DoT was working on release of spectrum in 2100MHz band by Defence.

Besides, the Telecom Commission has also asked the DoT to reexamine Trai’s recommendation on adaptation of the extended GSM band taking unused spectrum from the 800MHz band (currently used by the CDMA players). While the DoT has repeatedly rejected the Trai suggestion, the Telecom Commission has asked the DoT to reexamine it again and submit its decision to the telecom panel before its next meeting.

Meanwhile, the Telecom Commission has recommended reserve prices for spectrum in 800, 900 and 1800MHz bands for the upcoming auction in February.

According to the recent discussion, the Telecom Commission has recommended the base price of 900MHz band spectrum at Rs 3,693 crore per megahertz across 18 circles, about 23 per cent more than what the Telecom regulatory Authority of India (Trai) has suggested.

For 800MHz band, the telecom panel has suggested the base price at Rs 3,646 crore per MHz (pan India), about 17 per cent higher than the Trai recommended price.

For 1800MHz band, it has recommended the base price at Rs 2,191 crore per MHz across 20 telecom zones.

The suggested reserve price for the next auction would now be placed before the Communications and IT minister Ravi Shankar Prasad for approval, and then it may be placed before the Cabinet.

The DoT has recently asked Trai for its recommendations on pricing and valuation of 2100Mhz spectrum band, that it wants to auction in February along with the 800, 900 and 1,800-MHz bands. Trai has already floated a consultation on the same.

There were doubts regarding the 2,100-MHz band because the DoT had earlier said there was no indication from the defence forces on vacation of spectrum. However, the issue seemed to have been resolved after Prasad and Defence Minister Manohar Parrikar met last month. Both the ministries are believed to have sorted the issue.

The industry has long been asking for additional spectrum for commercial use and has been asking the Government to auction 2,100MHz band of radiowaves. The main point of contention was a plan that the defence ministry would give 15 MHz of spectrum in the 2,100 MHz band in return for the same amount in the 1,900 band, which was with the DoT and had been reserved for providing spectrum to CDMA operators for expansion. Earlier, the two ministries had agreed the spectrum in the 1,700-2,000-MHz band would be equally divided between the two, each getting 150 MHz.

Simultaneous auction of all the bands would benefit the operators, including Bharti Airtel, Vodafane, Idea and Reliance Communications, which had feared a shortage of spectrum would lead to cut-throat competition and raise auction prices.

The DoT has estimated that the next round of spectrum auction, scheduled in February, will add at least Rs 9,355 crore from sale of spectrum. As per estimates, auction of spectrum in 2100 Mhz band in February can fetch bids worth at least Rs 5,000 crore.

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