Rejecting Telecom Regulatory Authority of India (TRAI)’s recommendations, the Telecom Commission (TC) approved a base price of Rs 3,705 crore for each MHz of 2,100-MHz spectrum, which would be auctioned on February 25. The approved prices is around 36% higher than the Rs 2,720 crore suggested by TRAI and about 11% higher than what companies paid for the same in 2010 sale. But, the final decision would be taken by the Union Cabinet in its meeting which is scheduled in the coming week.
Further, TC also reiterated its stand of auctioning only 5 MHz of spectrum in the 2,100-MHz band in the coming round, which based on the reserve price, would translate into a total earning of at least Rs 18,500 crore for the government. However, since companies make an upfront payment of 25% of the total, the immediate proceeds from the auction of 2,100-MHz spectrum will come to Rs 4,265 crore, which is more or less in line with the government’s expectation of around Rs 5,000 crore from the band this financial year.
Trai, which had recommended a base price of Rs 3,408 crore per MHz for the previous 3G spectrum auction round in 2010, had reduced the suggested rate by 22% for the coming round of auctioning.
Besides 2,100-MHz, the government would also be auctioning airwaves in the 800-, 900- and 1,800-MHz bands in February, by which it expects to garner a total revenue of Rs 80,000 crore to Rs 1 lakh crore.
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