Spectrum sale:TRAI begins consultation for auction round III

Telecom regulator TRAI today started fresh consultation process for valuation and reserve price of spectrum for third round of auction, after failure of two rounds which industry had attributed to high base price.

"On July 10, 2013, the Department of Telecommunications sought TRAI's recommendations on the applicable reserve price for the auction of spectrum in 800 Mhz (CDMA), 900 Mhz and 1800 Mhz (GSM) bands. In this context, TRAI has issued consultation paper," Telecom Regulatory Authority of India (TRAI) said in a statement.

TRAI has invited comments on the quantity of spectrum that should be kept for auction, time that winner of airwaves should be given to roll out network and the method to be used for valuation and estimation of reserve price.

The regulator has sought view from parties interested in the process by August 14, counter comments by August 21. It will also hold an open house discussion on the subject on August 26.

Government is required to conduct the third round of spectrum auction for 1800 Mhz in 20 out of 22 circles to comply with a Supreme Court order that has directed it to auction entire spectrum freed from cancellation of 2G licences in February, 2012.

The government had put on sale 271.25 Mhz of spectrum in November, 2012, including 60 Mhz of CDMA spectrum. As much as 473.6 Mhz of spectrum that was freed after the Supreme Court order in February last year. The November auction could fetch government only a sum of Rs 9,407.64 crore against spectrum worth Rs 28,000 crore at base price.

Government again placed unsold spectrum worth Rs 45,000 crore for auction in March 2013 after reduction in base price, but only Sistema Shyam Teleservices made bids worth Rs 3,693 crore for CDMA spectrum.

Later, DoT proposed to Empowered Group of Ministers on spectrum to auction airwaves that remained unsold in both the rounds.

For the first round of spectrum auction held in November 2012, TRAI had recommended around 11 times base price for telecom airwaves compared to the amount paid by companies in 2008.

After opposition from the industry, government reduced the price by around 23 per cent for 1800 Mhz to Rs 14,000 crore for 5 Mhz of pan-India spectrum but even then the auction failed to sell all spectrum that was kept for sale.