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TRAI's spectrum price recommendations evokes mixed reactions

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SummaryTRAI suggested a pan-India reserve price of Rs 1,496 crore per MHz in the 1800 band.

as a mixed bag.

"Recommendations are a mix bag as far as AUSPI is concerned. We are happy that there will be no reservation for renewal of licences in 1800 MHz and 900 MHz band, this means full refarming will happen," AUSPI Secretary General Ashok Sud said.

Sud, however, said there is major negative recommendation that 800 MHz band should not be auctioned, which means CDMA operators who want to add more circles or could have increased their spectrum holding for latest technologies at a reasonable price will not be able to do it.

"It is a death warrant for companies like MTS which has operations in nine circles," he added.

Consultancy firm KPMG said a lower reserve price for 1800 MHz band is expected to improve the industry sentiments.

"However, the concerns of winners who acquired spectrum at higher prices in the recent auctions would need to be addressed," KPMG Partner Jaideep Ghosh said.

He added the recommendation on full re-farming of the 900 MHz spectrum would impact individual operators differently based on their market entry timing and existing spectrum holdings in different circles.

Deloitte Haskins & Sells also welcomed the reduction in reserve price, however, it said the government should consider starting with the floor price at zero and let the market decide the final price.

"We still believe that the DoT/ Govt should consider starting with the floor price of zero and let the market forces decide the final price for the spectrum," Deloitte Haskins & Sells Partner Hemant Joshi said.

NGO Telecom Watchdog's Secretary and co-petitioner in 2G spectrum case, Anil Kumar said that new reserve price is much lower than the rate at which the spectrum of 800 MHz was awarded in the March 2013 auction.

"Sistema Shyam won the spectrum in 800 MHz band for Rs 360 crore per MHz in Delhi whereas Trai has now fixed just Rs 288 crore per MHz in 900 MHz band as the reserve price. This will not only cause substantial revenue loss to the government but also disturb the level playing field especially amongst the new players," he said.

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