A technical committee of the Department of Telecom has suggested a 15-20 per cent increase in the reserve price of spectrum which will be auctioned in the next round in February.

The Telecom Regulatory Authority of India (TRAI) had recommended a reserve price for 800 MHz spectrum at ₹3,104 crore for pan-India spectrum. The DoT committee has proposed this be raised to ₹3,646 crore. The TRAI’s price was itself 15 per cent higher than the price fixed in February and 72 per cent higher than the ₹1,800-crore fixed in the 2013 auction.

The 800 MHz band is used by CDMA operators including Tata Teleservices and Sistema Shyam. The operators said the new pricing was unreasonable.

“The price recommended in February 2014 was itself unreasonably high, and despite the cogent reasoning provided by us as to why the reserve price for 800 MHz band spectrum should not be higher than that of 1800 MHz spectrum under any circumstances, we are disappointed that the base price is being increased further,” said one of the CDMA players.

The panel has also recommended 15-20 per cent higher reserve price for 1800 MHz and 900 MHz bands used by GSM players. The telecom regulator had suggested ₹2,138 crore as the base price for airwaves in the 1800 MHz band in 20 circles and ₹3,004 crore for 900 MHz band in 18 circles.

The DoT panel’s proposal will now be put before the Telecom Commission for final approval. “If the Telecom Commission were to accept the price recommended, we fear that not only would the auction be a non-starter, but it would severely impact the operator’s financial and business models to support Internet and data services, on a level playing field with other players,” said the Association of Unified Telecom Service Providers of India.

The DoT panel has also rejected TRAI’s proposal to take back spectrum from MTNL and BSNL. TRAI had asked DoT that it should take back airwaves from the two PSUs and the entire available spectrum with DoT in the 800-MHz band should be auctioned.

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