India’s Department of Telecom (DoT), ignoring the regulator’s complaints about the high base price and scarcity of 3G spectrum to be auctioned next month, has suggested a reserve price 36 per cent higher than the Telecom Regulatory Authority of India’s recommendation in late December.
DoT’s Telecom Commission has proposed the 5MHz of 2.1GHz spectrum be priced at INR37.05 billion ($595 million) per megahertz, which is 5 per cent lower than its first recommendation, but 11 per cent above the auction price of the same frequency in 2010, the Economic Times said. After an internal review, the commission fixed the reserve price at 80 per cent of its total valuation, which it indexed from the 2010 price.
The cabinet was scheduled to review the commission’s final proposal today.
TRAI last week criticised the government for raising its recommended base price by 43 per cent and for only putting 5MHz of 3G spectrum on sale, arguing the higher price and the limited supply would likely end up “restricting competition, rather than stimulating it”.
The auction is scheduled for 23 February and will now include 2G and 3G spectrum in the 800MHz, 900MHz, 1.8GHz and 2.1GHz bands.
The government expects the auction, not including the 2.1GHz spectrum, to bring in at least INR648.4 billion ($10.4 billion). The 3G band is expected to generate another INR185 billion.