TRAI calls for comments on spectrum pricing

11 Aug 2014

The Telecom Regulatory Authority of India (TRAI) has issued a consultation paper regarding the base price for spectrum in the upcoming auction, scheduled to take place in February 2015. The TRAI is inviting comments from stakeholders by 8 September, and counter-comments by 15 September. Up for grabs is 184MHz of 900MHz spectrum (49MHz of which is non-contiguous) across 18 operating areas, and 104MHz in the 1800MHz range (of which, only 40MHz is available in contiguous 5MHz blocks) in 17 circles. Frequencies in the 2100MHz and 800MHz bands are also expected to be put up for sale, although the Department of Telecommunications (DoT) has not yet made an official request for price recommendations for those bands. The tender features 900MHz spectrum from licences due to expire in 2015/2016 and, as previously reported by CommsUpdate, there is insufficient spectrum in the 1800MHz band for those licensees to fall back on should they fail to win-back their 900MHz holdings, so some operators may be forced to shut down operations in certain service areas if they cannot purchase the necessary frequencies. The TRAI has acknowledged the problem in the consultation paper, noting: ‘The auction poses a very real problem for incumbent licensees i.e. the very continuity of their service in an LSA [licence service area] is subject to the outcome of the auction. The situation becomes more serious considering the fact that in most LSAs there is not much spectrum available in the 1800MHz band either.’ Making the situation worse, the TRAI also added that it expects there to be fierce competition for the 900MHz spectrum, as it provides better coverage and penetration than the 1800MHz band. The TRAI also noted that a sizeable portion of the spectrum on offer is non-contiguous and as such is unsuitable for providing lucrative data services. Pointing out that the most recent auction took place less than a year ago, in February 2014, the TRAI has sought comments on whether or not there is a case for re-evaluating the reserve prices set for previous sale.