Telecom panel refers back spectrum proposal to regulator

The inter-ministerial panel, Telecom Commission, Friday referred back the spectrum valuation and pricing proposal for the upcoming auction to the regulator for review, according to a source.

"The panel today has sent back the reference to the Telecom Regulatory Authority of India (TRAI) as some clarifications are required. Hence the panel wants the TRAI to review it," the source said.

It is learnt that the panel has asked the regulator to come back with the reworked recommendations within a fortnight.

The TRAI Oct 15 recommended around a 10 percent hike in the reserve price for 1,800 MHz band spectrum auction compared to the winning price in the Feb 2014 sale.

In Dec 2015, seven licenses each of Idea Cellular and Reliance Communications, four licenses of Bharti Airtel and six licenses of Vodafone will complete their 20-year term after which they should be renewed.

"In the 900 MHz band, only the spectrum held by them is available for the auction. These licensees will have to win back this spectrum to ensure business continuity in a licence service area (LSA); if they don't, it places the large investment made in the LSAs in jeopardy," the TRAI said.

It has set a price of Rs.3,004 crore per mega hertz for bandwidth to be auctioned in 18 service areas for the more efficient 900 Mhz band and Rs.2,138 crore per mega hertz for the 1,800 MHz band.

The auction is expected to be held in Feb 2015. In the 1,800 MHz band, 20 circles are going for auction, while in the 900 MHz band 18 circles will be up for sale.

The recommendations said spectrum should be put to auction in a block size of 2x200 KHz in both the 900 and 1,800 MHz bands.

The revenue target set by the government in 2014-15 budget from spectrum auction is Rs.45,471 crore.

In 2013-14, the total receipts from auction were of the order of Rs.40,847.06 crore. In Feb 2014, in a 10-day auction of 900 MHz and 1,800 MHz, the government mopped up Rs.61,162 crore.