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TRAI recommends 10% price hike for next round of 2G spectrum

16 Oct 2014 Evaluate

On account of increased data usage by consumers, Telecom regulator, TRAI has recommended 10% price hike of 2G spectrum in the 1800 MHz band, in 20 circles at Rs 2,138 crore per MHz, during the next round of auctions. The recommended hike is 10% higher as compared to forthcoming auction of airways in the Licence Service Areas (LSAs) with the earlier one.

Despite this hike, the suggested price per MHz is around 6% lower than in the February auction when the Government had received bids valued at Rs 2,270.4 crore per MHz in the 1800 Mhz band. Further, according to the regulator, the price of spectrum would come down to Rs 2138 crore if the spectrum isn’t auctioned for Maharashtra and West Bengal service area due to non-availability of full spectrum.

Further while, deciding upon the price of 1800 Mhz band, TRAI used various approaches and derived their average expected valuation. The regulator then compared it with price achieved in February auction and suggested taking higher of the two prices.

Meanwhile, the telecom regulator has recommended a price of Rs 3,004 crore per MHz for the 900 MHz band, in which the mobile signal covered is about twice that of the 1800 MHz band. However, the amount per band is available only in 18 out of 22 circles as service area in J&K, Delhi, Mumbai and Kolkata are excluded.  The spectrum auction for the 900 MHz band would be conducted for airwaves in 900 Mhz held by existing telecom operators- Airtel, Vodafone, Idea Cellular and Reliance Communications through their licences that are expiring in 2015-16.

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