TRAI used a different way for CDMA spectrum base price: AUSPI

Telecom industry body AUSPI has criticised TRAI saying the sector regulator adopted different approaches for determining base prices of CDMA and GSM spectrum for auction.
The regulator on February 22 recommended a base price of Rs 2,685 crore per megahertz for CDMA airwaves which, AUSPI said, is 47 per cent higher than the minimum price earlier approved by the Empowered Group of Ministers on Telecom, and 80 per cent higher than the base price of 1800 Mhz--generally known as 2G spectrum.
In a letter dated March 10 to Telecom Minister Kapil Sibal, AUSPI said: "TRAI has not followed consistent approach while determining valuation of 800 Mhz (CDMA) spectrum and 900 Mhz spectrum (being used for GSM services) band."

"The Authority while determining the valuation of 900 Mhz in September 2013 had taken average of valuation of 1800 Mhz ignoring the market determined price of November, 2012 auction. But for 800 Mhz, TRAI has taken the winning price of 1800 Mhz," AUSPI, which represents operators SSTL, RCom and TTSL said.
Sistema Shyam Teleservices (SSTL), RCom and Tata Teleservices provide CDMA services.
RCom and TTSL also have spectrum for GSM services like that of Airtel, Vodafone, Idea and others.

The Telecom Regulatory Authority of India (TRAI) suggested a base price for CDMA spectrum after lot of friction with the government. The regulator has recommended against auction of these airwaves in 2013 and suggested exploring the possibility of using a part of it for GSM services.

The regulator recommended about 37 per cent reduction in base price of 1,800 Mhz spectrum band and up to 62 per cent for premium 900 Mhz band. Most of these airwaves were sold out auction in February which fetched government bids worth about Rs 62,162 crore.
AUSPI said that while recommending lower reserve price for 1800 Mhz and 900 Mhz band, TRAI considered deteriorating condition of Indian economy, financial distress on sector and muted interest of industry in buying spectrum due to high base price in last auctions held in November 2012 and March 2013.
"...Within few months, TRAI has completely ignored these aspects and recommended a higher reserve price for 800 Mhz band compared to the previous auctions," AUSPI said.

Trai had said that given the fact 800 Mhz band has potential to deploy 4G technology and allow access to more devices one can assume that the value of spectrum in the 800 Mhz band will be higher than the value of the 1800 Mhz spectrum as revealed in the February, 2014 auction.
AUSPI asked Telecom Minister Kapil Sibal that "Reserve price of 800 Mhz may be fixed at 65 per cent of the reserve price for 1800 Mhz as decided by EGoM and Cabinet" and "All available 800 Mhz spectrum should be auctioned without waiting for surrender by BSNL and MTNL.