TRAI makes spectrum price recommendations, sets INR114.9bn price tag for 700MHz

28 Jan 2016

The Telecom Regulatory Authority of India (TRAI) has published its recommendations on reserve prices for frequencies in the 700MHz, 800MHz, 900MHz, 1800MHz, 2100MHz, 2300MHz and 2500MHz bands for the upcoming spectrum auction, calling for the government to complete the spectrum harmonisation process in the 1800MHz band, and to carry out a similar re-assignment exercise in the 800MHz range before proceeding with the tender. Responding to requests from cellcos to adjust the amount of spectrum that operators care permitted to hold, the TRAI also found that there was ‘no plausible reason’ to change the existing policy on spectrum caps, which limits providers to 25% of the total assigned spectrum and 50% of the assigned spectrum within a particular band.

In its recommendation, the watchdog suggested that the Department of Telecommunications (DoT) should complete its harmonisation of the 1800MHz band – the reshuffling of frequencies assigned to operators and reserved for the Ministry of Defence (MoD) to free up unused fragments of spectrum and arrange allocations into contiguous blocks – before commencing the auction to ensure that the maximum amount of spectrum is available for operators. Similarly, the TRAI recommended that the DoT rearrange spectrum allocations in the 800MHz band to free up additional airwaves, stressing that: ‘the sub-optimal utilisation of spectrum not only amounts to denial of the opportunity for its better use by others but also a revenue loss to the government in terms of upfront payment, annual licence fees (LF) and spectrum usage charges (SUC).’

Regarding the 700MHz band, which will be made available for the first time in the coming sale, the TRAI recommended using the APT700 band plan, with frequency division duplex (FDD)-based frequency arrangement. The entirety of the available spectrum (2×35MHz) should be put up for sale, the TRAI added. The regulator determined a reserve price of INR114.85 billion (USD1.69 billion) per MHz (paired) of pan-India spectrum, with per MHz prices per circle ranging from INR440 million (North East) to INR15.95 billion (Delhi). The TRAI also suggested adding rollout obligations requiring concession winners to cover all towns and villages with populations between 15,000 and 50,000 within five years, and all towns and villages of 10,000-15,000 residents within seven years.

The reserve prices for pan-India spectrum in the 1800MHz and 2100MHz bands was set at INR28.73 billion and INR37.46 billion per MHz (paired), respectively, whilst prices for 2300MHz and 2500MHz were both set at INR8.17 billion per MHz (unpaired).