Telecom Regulator Recommends Base Prices for 3G Spectrum

The Telecom Regulatory Authority of India (“TRAI”) issued the recommendations on the valuation and reserve price of spectrum for the 2,100 MHz band on December 31, 204 (the recommendations issued by the TRAI can be downloaded here), whereby it has recommended the base prices for the auction of 3G spectrum.

The TRAI has yet again recommended that the spectrum in the 2,100 MHz band should be put to auction alongwith the spectrum in the 800 MHz, 900 MHz and 1,800 MHz spectrum, scheduled for next month. The TRAI has observed that the simultaneous auction may be possible, since the Ministry of Defence has in-principle agreed for the release of 15 MHz of spectrum in the 2,100 MHz band. Our previous posts in relation to the developments in this regard can be accessed here and here. The TRAI has observed that the said amount of spectrum should be auctioned simultaneously with 2G spectrum even if the same is not available immediately, since the actual assignments do not have to be made immediately.

With regard to the roll-out obligations, the TRAI recommends that the obligations applicable to the spectrum in the 2,100 MHz band should be applicable for the upcoming auctions; however the period to meet these obligations should be reduced from 5 years to 3 years.

The TRAI has recommended that Department of Telecommunications (“DoT”) must take steps to ensure the 3G spectrum auctioned earlier and subsequently cancelled by the Supreme Court of India should also be put to auctions.

The TRAI has proposed a base price of INR 27.2 billion for a unit of 3G spectrum, raising the possibility of the government netting a substantial chunk of revenue from the spectrum auctions, easing worries about the fiscal deficit. The base price for the 3G spectrum auctioned in 2010 was around INR 35 billion.

TRAI, in the recommendations, provides a complete list of the base price for the spectrum auction in the 2100 MHz spectrum band.