The Hindu Business Line : Higher base price for 3G, WiMax auction proposed

New Delhi, July 11 The Telecom Regulatory Authority of India on Friday proposed to raise the base price for operators participating in the auction for third generation mobile and broadband wireless spectrum.

While the base price for 3G services has been revised upwards from Rs 1,400 crore to Rs 2,200 crore for a pan-Indian licence, operators wanting to bid for wireless broadband spectrum will have to cough up to three times more than what was recommended earlier.

The TRAI suggestions are in line with the views of the Department of Telecom, which wanted to raise more revenues from the auction.

For wireless broadband services using technologies, such as Wi-Max, TRAI had earlier set a base price of Rs 10 crore, Rs 5 crore and Rs 2 crore for Metro, category B and category C circles respectively. Now this has been revised to Rs 60 crore, Rs 30 crore and Rs 10 crore respectively.

This means an operator will have to pay at least Rs 800 crore upfront for a pan-Indian wireless broadband licence.

TRAI justified its decision saying that it was based on global standards. The regulator has also changed its earlier suggestion on the quantum of spectrum to be auctioned for broadband wireless.

Under the revised scheme, auction will be done for blocks of 5 Mhz, with operators allowed to take a maximum of 15 Mhz. DoT was planning to allocate blocks of 10 Mhz to each operator.

Reacting to the TRAI recommendations, Mr C.S. Rao of the WiMax Forum said, “This high reserve price would affect the business models to some extent. We would work with TRAI and DoT to get this corrected and make them revise the base price norms. We are confident that DoT and TRAI would be able to respond to this much needed request.”

He, however, said that the decision to open up the 2.3 GHz and 2.5 GHz band for wireless broadband will enable subscribers to get affordable services as infrastructure equipment and devices were available at competitive prices from the global market in these bands.

Mr Rajesh Chharia, President, Internet Service Providers Association of India, said, “The high base price has been designed to favour the large players. This puts out the internet service providers (ISPs) out of the equation as they will not be able to pay the high entry cost. At a time when the Government has failed to meet its broadband targets one fails to understand why ISPs are being given an unfair treatment.”

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