Trai sets ball rolling for spectrum auction

Govt likely to fetch Rs 5.36 lakh crore

The Telecom Regulatory Authority of India (Trai) on Wednesday set the ball rolling for next round of spectrum auction by making its recommendations on valuation and reserve price of radiowaves in the 700, 800, 900, 1800, 2,100, 2,300 and 2,500 MHz bands which will fetch the government a staggering Rs 5.36 lakh crore.

Of the Rs 5.36 lakh crore windfall, the premium 700 Mhz band spectrum could alone contribute over Rs 4 lakh crore if all frequencies are sold at pan-India base price of Rs 11,485 crore per Mhz, which is the highest price for any telecom radiowave.

The Trai suggested Rs 11,485 crore per Mhz pan-India base price for premium 700 Mhz spectrum. The regulator in its recommendations on spectrum price for seven bands, including 700 and 800 Mhz, suggested a base price of Rs 2,873 crore per MHz for pan-India 1800 MHz frequency band - widely known as 2G spectrum.

The government is planning to hold auction in May-June this year. If the government is able to sell all spectrum with the price determined by the Trai, it will not only solve the call drop problems but also help to wipe out the government's fiscal deficit substantially in 2016-17.

The proposed auction assumes importance in the wake of Prime Minister Narendra Modi's ambitious Digital India rollout to improve governance and provide public services across the country especially the hinterland.

The Trai for the first time has suggested the base price for 700 MHz, which is considered as the most efficient frequencies for high-end mobile services.