Spectrum auction: Trai starts consultation for floor price

Written by fe Bureau | Updated: Aug 8 2014, 06:54am hrs
The minimum bidding requirement for 5 MHz of spectrum in the 900 MHz band needs to be reconsidered, according to a consultation paper released by the Telecom Regulatory Authority of India on Thursday. Trai, which has begun the consultation process for the next round of auctions for spectrum held by telcos, further added that putting a restriction to bid for at least 5 MHz in the 1,800 MHz of spectrum would make telcos ineligible for bidding in some licensed service area (LSAs).

If the requirement to bid for a minimum of 5 MHz in the 900 MHz band is retained in the upcoming auctions, then in West Bengal, no spectrum can be put up for auction since there is availability of only 4.4 MHz spectrum in 900 MHz band, the consultation paper said.

The paper proposes that in the case of 900 MHz spectrum auctions, the block size could be kept at 1 MHz with the bidders being allowed to bid for a minimum of 3 MHz of spectrum instead of 5 MHz. It also proposes an alternative, of keeping the minimum bid as 5 MHz in all LSAs except in West Bengal and North East, where the minimum bid is reduced to 3 MHz.

The process would determine the reserve price of spectrum to be auctioned across 18 out of the 22 telecom service areas across the country for 900 MHz and 1,800 MHz bands, used for providing mobile services based on GSM technology standard.

The key issues in the consultation paper are contiguity of spectrum, the block size, valuation of reserve price of spectrum in the 900/1800 MHz band, Trai said.

It has fixed September 8 as last date for receiving comments from stakeholders on the consultation paper, and September 15 for counter comments. Open house discussions would be held on September 22.

As per Trai, 184 MHz of spectrum in the 900 MHz band and 104 MHz in the 1,800 MHz band could be put up for the auction.

In the 1,800 MHz segment, Trai observed that treating a renewal licensee as a new entrant may not be justified in respect of these licensees.

If the condition that a new entrant is required to bid for a minimum of 25 Blocks (i.e. 5 MHz) in the 1,800 MHz band, is retained and the licensees, whose licences are due for renewal, are treated as new entrants (as was done in the last auction) then these licensees will be able to bid in only those LSAs where spectrum to be put for auction is 5 MHz, it added.

Telcos like Airtel, Vodafone, Idea and RCom would be participating in the upcoming auctions in 2015-16 to renew their existing licences that are set to expire by then.