Trai starts consultation process for spectrum auction

Telecom regulator Trai today began the consultation process for the next round of auctions

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for spectrum held by mobile operators - Airtel, Vodafone, Idea and RCom - as some of their licences are set to expire in 2015-16.

"The Telecom Regulatory Authority of India has today released consultation paper on valuation and spectrum price: Licence expiring in 2015-16," Trai said in a statement.

The process will determine the reserve price of spectrum to be auctioned across 18 out of the 22 telecom service areas across the country for 900 Mhz and 1800 Mhz bands, used for providing mobile services based on GSM technology standard.

"The key issues in the consultation paper are contiguity of spectrum, the block size, valuation of reserve price of spectrum in 900/1800 Mhz band" Trai said.

It has fixed September 8 as last date for receiving comments from stakeholders on the consultation paper, and September 15 for counter comments.

Trai will hold open house discussions on September 22 to discuss the subject in details.

As per Trai, 184 Mhz of spectrum in 900 MHz band and 104 MHz in 1800 Mhz band can be put up for the auction.

The government, in its Budget Estimates for the current financial year, 2014-15, has projected minimum revenue of Rs 9,355 crore from auction of 800 Mhz (used by operators providing mobile services base on CDMA technology standard) as well as the 900 Mhz and 1800 Mhz bands.

Trai has already given its recommendation for CDMA spectrum auction.

In December 2015, 4 licences of Bharti Airtel, 7 each of Idea Cellular and Reliance Telecom and 6 of Vodafone will complete their 20-year term and would require renewal.

The companies can renew their licences by paying a fixed fee but for continuing mobile and other wireless services they will need to buy spectrum afresh through auction at market determined rate. By April 2016, two more permits of Bharti and Idea will come up for renewal.

If Trai recommendations are finalised as per the expected timeline, then the auction are expected to start from February 3, 2015, according to sources, who said that the government expects to meet the Budget numbers at the very least.

The government has set a total revenue target of Rs 45,471 crore from communication services, including proceeds from the three sets of spectrum frequencies and related charges in 2014-15.

The receipts under the same head were Rs 40,847.06 crore in 2013-14, according to the revised estimates.

As per the process, government will take the final decision after considering recommendations of Trai. Besides auction of 900 and 1800 Mhz band, government is also working on auction of CDMA spectrum for which Trai has already given its recommendations.

The 10-day long auction held in February this year gave the government over Rs 61,162 crore, far exceeding the target.

Eight telecom firms had bid for 900 Mhz and 1800 Mhz bands.

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