TRAI recommends setting of high base prices for 2G auction

TRAI or the Telecom Regulatory Authority of India has suggested a very high base price for the auction of the 2G spectrum. The auction will be open for all the mobile service operators. SMRA method or the simultaneous multiple round auction method will be used for the auctions. The same method was used during 3G auctions that took place in 2010.

1800 MHz spectrum is set at the reserve price of Rs.3,622 crore and the 900 MHz for Rs.7,244 crore. While 700 MHz the price is set at Rs.14,000 crore. Hence 5 Mhz block  in 1800 Mhz band is all set to cost at a  reserve price of  Rs.18,100 crore or over. Rs.3,622.18 crore is the minimum price for pan-India /spectrum.

Telecom operators have however protested to the prices quoted above by TRAI. They say that these prices would raise the cost for them and eventually the subscribers will suffer as talking on phones will become expensive. Association of Unified Telecom Service Providers of India (AUSPI) and the Cellular Operators Association of India have expressed their disappointment in TRAI recommendations in a joint statement. The inconsistent and regressive nature of these recommendations have been questioned. The regulators had earlier suggested that the reserve price for 1800 MHz should to be set at Rs.1,658 crore – the price that cost a pan-India 2G license in 2008.

Uninor  said “It is up to the political leadership of India now to ensure that the gains of the past few years of affordable phone calls for India’s people are not undone.”

“It will hamper the ability to connect the unconnected and goes against the objectives of National Telecom Policy of ensuring improved rural tele-density and right to broadband,” said Vodafone.

On Feb 2 Supreme Court had cancelled 122 telecom licenses that were issued in 2008 and those telecom companies were asked to close down in four months. Those licenses would also be re-distributed in an auction as diected by the Apex Court.

TRAI said has suggested the liberalization of spectrum given in auctions that is any band of it is used for any kind of technological needs. 900MHz spectrum may be auctioned in the beginning of 2013 and 700 MHz by 2014. This is because of the renewal of expired licenses takes time. TRAI’s newest recommendations are sure to set the mobile service operators and subsequently the subscribers in a tizzy. We hope that a reversal is done soon. Who wants the phone calls getting costlier!

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