Trai proposes 50 pc hike in CDMA base price

Trai proposes  50 pc hike in CDMA base price

Telecom regulator Trai on Saturday recommended auction of CDMA spectrum or 800-MHz band airwaves at a reserve price of Rs 2,685 crore per MHz, which is around 50 per cent higher than the previous pan-India base price.

“Authority recommends that the reserve price for the forthcoming auction of the 800-MHz spectrum should be fixed at 80 per cent of the average valuation,” Trai said in its recommendation on “Reserve price for Auction of spectrum in the 800 MHz band”.

It recommended a reserve price of Rs 2,685 crore per MHz, as against Rs 1,800 crore fixed in March 2013.

The recommendations came after several rounds of discussion between the government and the regulator, which had earlier suggested that no auction be held for the 800-MHz band, used by CDMA operators and 4G services, for want of takers.

Earlier, an Empowered Group of Ministers, headed by Finance Minister P Chidambaram, asked Trai to suggest a base price for the CDMA spectrum.

The regulator also asked the government to carve out a contiguous block of 5 MHz frequency before conducting the auction. At present, contiguous blocks are available only in five of the 22 service areas across the country. They are Mumbai, Maharashtra, Madhya Pradesh, Assam and the North-East.

According to CDMA operators, harmonisation of frequencies may take months, or even years, delaying the auction of the 800-MHz band. Arranging one block of contiguous spectrum will require reassignment of frequencies already held by existing users.

It also recommended that the Department of Telecom (DoT) should auction the entire available spectrum in the 800 MHz band, including those to be taken back from public sector telecom firms BSNL and MTNL.

The CDMA spectrum is used by Sistema Shyam Teleservices, Reliance Communications and Tata Teleservices. Public sector companies like BSNL and MTNL also have CDMA spectrum, but they have offered to surrender a part of the airwaves. Airtel, Vodafone and Idea Cellular are GSM-based service providers.

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