The steeply high reserve price at Rs 11,485 per Mhz recommended by the Telecom Regulatory Authority of India (Trai) for auction of 700 Mhz spectrum has put the department of telecommunications in a fix. As is known, the telecom commission has already asked the regulator for providing the economic rationale for such high price as it feels that the latter has not done its homework properly. Sources told FE that the government now finds itself in a bind. “If the Trai does not reduce the prices, the government will be faced with tough choices. It will either have to reduce the prices or decide between not holding the auctions for this band of spectrum at this stage,” sources said. Both the options are again fraught with risk, they added. If the prices are reduced, how much can it be from such high rate? “If the auction for this band is deferred, a section may charge that the government has buckled under the pressure of some lobby group,” the sources added.
