Trai: No definite formula for determining reserve price

By: |
New Delhi | Published: January 19, 2018 5:47:27 AM

Telcos ask regulator to consider sector’s fiscal distress, spate of consolidations and exits while deciding timing of next round

Trai, Trai chairman, RS Sharma, Bharti Airtel, vodafone india, news on TRAI, Idea Cellular, relaince jio, department of telecom, COAI, Broadband India Forum“The Authority has been vested with the onerous responsibility of determining the reserve price in such a manner that it does not compromise on the principles of transparency and ensure adequate participation from the industry,” Sharma said.

Trai chairman RS Sharma said on Thursday that the task of identifying reserve price for spectrum is an “onerous responsibility” and that there is no “definite formula” to determine it. However, some industry representatives for the first time suggested Trai that it should come out with a formula to calculate reserve price instead of the present practice of benchmarking it with the prices of the previous auctions. Such a step will lead to a scientific methodology of fixing reserve price. There are a number of factors that are relevant while looking at the reserve price for any spectrum band, Trai chief said, adding that there is no definite formula to determine it. “Often these factors are difficult to quantify, but they are still relevant and are required to be considered,” he added. Sharma was speaking at the open house discussion (OHD) conducted by Trai on auction of spectrum in 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300-3400 MHz and 3400-3600 MHz bands. In April last year, the department of telecom (DoT) had requested Trai to give its recommendations on the reserve price, quantum of spectrum that is to be auctioned and other associated conditions. “The Authority has been vested with the onerous responsibility of determining the reserve price in such a manner that it does not compromise on the principles of transparency and ensure adequate participation from the industry,” Sharma said.

When asked by reporters on the time frame by which Trai will come out with the recommendations, he said, “I cannot comment on what will be the end date. As always we will try to do it as soon as possible. It entails a lot of exercises in order to arrive at the reserve price”. During the discussion, telecom operators were almost unanimous in their views and urged that the regulator should give due regard to the industry’s distressed financial situation and the ongoing consolidations and exits while deciding on the timing for next round of auction. On industry’s opinion that the timing is not conducive for auction, Sharma told reporters that all the aspects will be considered before a view is formed.  When asked whether the prices during the 2016 spectrum auction were high leading to a muted response from the industry, he said, “It is difficult to come to the conclusion on what is the right price”. The discussion saw participation from representatives from Bharti Airtel, Vodafone India, Idea Cellular and Reliance Jio as well as industry bodies COAI and Broadband India Forum, among others.

Do you know What is Centrally Sponsored Scheme, Non Tax Revenue, Non Debt Capital Receipts, Consolidated Fund of India, Disinvestment? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Next Stories
1GST Council cuts tax rate on 29 items, increases on 2; Here’s the full list of items with new rates
2Arun Jaitley says planning these steps to simplify GST return filing process
3Budget 2018 must stimulate agricultural sector to help fertiliser players, says Icra