TRAI to make recommendations for spectrum reserve price: Kapil Sibal

man-talking-on-mobile-635A high powered ministerial panel on Thursdsay sought telecom regulator TRAI’s opinion on the start or reserve price to be set for forthcoming spectrum auction.

The Telecom Regulatory Authority of India (TRAI) has been asked to give its recommendation within 60 days.

“It was decided that on the issue of reserve price the matter should be referred to TRAI and we would request the TRAI to give its recommendations before the end of 60 days because government is very keen to move forward and sell the spectrum,” Telecom Minister Kapil Sibal told reporters.

The Department of Telecom (DoT) is required to conduct third round of spectrum auction in 20 out of 22 service areas to comply with the Supreme Court order of February 15, 2013.

The DoT is learnt to have planned to auction all the spectrum- 800 Mhz (CDMA), 900 Mhz (GSM) and 1800 Mhz (2G GSM), in the third round that were put up for auction in March 2013 but remained unsold.

Sibal added that after receiving the recommendations, the Empowered Group of Ministers (EGoM) will meet to fix the reserve price so that spectrum in all bands can be sold.

“As and when the TRAI makes a recommendation, the EGoM will meet and fix the reserve price and move forward so that all spectrum in all bands should be sold,” Sibal added.

As per initial recommendation of TRAI in April 2012, the base price of pan-India 5 megahertz of spectrum amounted to Rs. 18,200 crore, which was around 10 times high than the amount paid by telecom companies in 2008 for the same.

The key issue at the EGoM meeting was price for spectrum in premium 900 megahertz which was is fixed at two times higher than that for 1800 Mhz as per recommendation of TRAI.

This band is said to provide almost double signal coverage than by signals transmitted in 1800 Mhz band.

The Cabinet has earlier in 2013 approved reduction of 30 percent reserve price for GSM spectrum (1800 Mhz band) fixed for November 2012 auction. The final reserve price for unsold airwaves in Delhi, Mumbai, Karnataka and Rajasthan cumulatively amounted to Rs. 11,876 crore.

Sources privy to discussion in the meeting said Finance Minister P Chidambaram, External Affairs Minister Salman Khurshid and Sibal favoured the EGoM deciding on spectrum price. However, Planning Commission Deputy Chairman Montek Singh Ahluwalia and Information and Broadcasting Minister Manish Tewari were for sending the matter to TRAI, they added.