Commission takes the middle path on spectrum pricing

7 Nov 2013

India’s Telecom Commission has altered the Telecoms Regulatory Authority of India’s (TRAI’s) proposals for spectrum pricing for the upcoming frequency auction, suggesting prices higher than those recommended by the regulator. The Economic Times writes that the Commission has recommended a 15% increase in cost for 1800MHz spectrum from the TRAI’s proposed price, and a 25% increase for 900MHz airwaves. Nevertheless, the end prices are still substantially lower than those set for the previous auctions in November 2012, and a decrease compared to the proposals of the Department of Telecommunication (DoT). The proposed price for pan-India 1800MHz spectrum was set by the Commission at INR17.63 billion (USD238.42 million), compared to INR14.96 billion suggested by the TRAI and INR22.03 billion by the DoT. The Commission rejected the TRAI’s plans regarding the 800MHz spectrum however, and has instructed the watchdog to calculate a price for pan-India spectrum in that band. The regulator had omitted the 800MHz band from its calculations on the basis that there was no demand for the airwaves, although protests from CDMA operators such as Sistema Shyam TeleServices (SSTL) has prompted the Commission to reject the TRAI’s conclusions.

The Commission has also recommended altering merger and acquisition rules, lifting the maximum combined market share of a merged entity in a circle to 50% from its current 35%. The recommendations of the commission must receive approval from a panel of ministers and the cabinet before being put into force.