Certain recent media reports indicate that an internal committee of the Department of Telecommunications (“DoT”) has suggested a higher base price for the auction of 3G spectrum in the band of 2,100 MHz as opposed to the recommendations of the Telecom Regulatory Authority of India (“TRAI”).
The TRAI had on December 31, 2014 recommended a base price of INR 27.2 billion for a unit of 3G spectrum. You may refer to our earlier post on the issue Telecom Regulator Recommends Base Prices for 3G Spectrum for the details regarding the said recommendations. Now the DoT committee is reported to have suggested that the market determined price of the 2010 3G auctions should be indexed using Prime Lending Rate of the State Bank of India (“SBI PLR”) and 80% of the said amount should be fixed as reserve price for the upcoming 3G auctions.
In of the same, the DoT has now sent back the recommendations to the TRAI for its review and reconsideration. The DoT sis of the opinion that the base price for the upcoming auctions cannot be lower than the final bid amount for 2010, when the operators had bid INR 33.4 billion per MHz. The DoT and the TRAI have already been on loggerheads with respect to the quantum of spectrum to be auctioned and the present controversy adds to the same.
Besides, some media reports also suggest that DoT committee proposed that the base price of 3G spectrum should be INR 38.99 billion per unit of spectrum. The said price is about 43% higher than the rate recommended by TRAI.
The Local Loop 