The Telecom Regulatory Authority of India (TRAI) is expected to give recommendations for base price and valuation of 3G spectrum by early January as the government plans to auction the airwaves along with 2G sale scheduled in February.
“There is an open house discussion on December 22 on the issue and the recommendations can be out by the first two weeks of January or earlier,” a source in sectoral regulator TRAI said.
TRAI has issued a consultation paper on valuation and reserve price of spectrum in 2100 MHz band, used for 3G services, on December 2.
The Department of Telecom (DoT) had on October 16 asked the telecom regulator to give recommendations for reserve price of spectrum in 2100 MHz, 2300 MHz and 2500 MHz bands. DoT though on November 27 asked TRAI to expedite the process for 2100 MHz band pricing.
“TRAI will give the recommendations of 2100 MHz first and later work on 2300 Mhz and 2500 MHz bands,” the source said. Telecom companies as well as the regulator have been of the view that the auction should take place only when adequate spectrum is made available, and the bidding should be held simultaneously for both the services – 2G and 3G.
The Department of Telecom is in talks with the Defence Ministry for vacation of spectrum in 2100 MHz band and there are three possible scenarios under deliberation. In case one, if no spectrum is released by the Defence, then auction cannot be conducted in this band.
The second scenario is that it releases 5 MHz in 17 circles. In that case one block of 5 MHz spectrum will be available for auction in 17 circles.
The third scenario could be the Defence swapping 2100 MHz spectrum with 1900 MHz. In that case, in addition to 5 MHz spectrum in 17 circles, it may release 15 MHz on pan-India basis by swapping 2100 Mhz spectrum with 1900 Mhz.
The Defence had released 20 MHz out of 25 MHz in 2100 MHz band allocated to DoT under the agreement with Defence on a pan-India basis and one more block of 5 MHz in 5 circles, which was auctioned in 2010.
Under the agreement with the telecom department (DoT), the remaining spectrum is to be vacated only after the alternate communication network is completed.
The next round of spectrum auction is proposed to be held in February and the government is estimated to garner at least Rs 9,355 crore from sale of radio waves.
As per estimates, auction of spectrum in 2100 Mhz band in February can fetch bids worth at least Rs 5,000 crore.