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Department of Telecom to seek rejection of Trai's proposal

The Department of Telecom (DoT) will seek a rejection of sector regulator Trai's proposal to reduce the reserve price of airwaves for CDMA operators.

The DoT panel studying Trai's recommendations has also approved the regulator's suggestion that spectrum held by incumbent GSM operators in the 900 MHz band be re-farmed - redistributed amongst all operators through auctions - when mobile permits of these companies come up for renewal beginning 2014.

Trai had said that the spectrum available with incumbents in the 900-MHz band, considered the most efficient for 2G operations in the GSM space, be replaced by spectrum in the 1,800-MHz band, which should be charged at the price prevalent at the time of re-farming.

But the telecom department panel has said that the Empowered Group of Ministers on spectrum, headed by finance minister Pranab Mukherjee must take the final call on the all aspects related to refarming, including the quantum of airwaves in the 900 MHz band that can be retained by incumbents, the amount of frequencies that must be redistributed and also if this exercise must be undertaken beginning 2014. This DoT panel has also rejected Trai's plans to impose rollout obligations (of setting up a minimum number of towers in each district) on telcos that bag airwaves through an auction process.

A final decision on DoT's position will be taken at a meeting of the Telecom Commission on Thursday. This will be communicated to the EGoM which has been tasked with the responsibility of finalising the guidelines for the auctions.

Last week, the Telecom Regulatory Authority of India has suggested that the reserve price for CDMA spectrum be cut from twice to 1.3 times the base price recommended for GSM airwaves in the 1,800 MHz band. But the DoT panel has sought that the regulator's original proposal of the reserve price in the 800 MHz band being twice as that of airwaves in the 1,800 MHz band be kept unchanged.

ET had reported earlier that DoT panel was pressing for a 17% increase in the base price for the 2G spectrum bids over the rate proposed by Trai. The panel has concluded that reserve price for 2G airwaves in the 1,800 MHz band should be revised to Rs 4,245 crore per unit (on a pan-India basis) as against Trai's suggestion that the base rate be Rs 3,622 crore per unit.

This implies, the base price for one unit of spectrum in the 800 MHz hand for CDMA operators will be about Rs 8,490 crore (double the reserve price of GSM spectrum in the 1800 MHz band).

- Economic Times