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Government could garner around Rs 5.4 lakh crore from mega spectrum auction

28 Jan 2016 Evaluate

The Telecom Regulatory Authority of India (TRAI) has recommended the base spectrum pricing for seven bands in the next round of auctions, including the 700 MHz spectrum. The new round of auction could fetch the government a staggering Rs 5.36 lakh crore, of which the premium 700 MHz band spectrum could alone contribute over Rs 4 lakh crore if all of this frequency were to be sold at the pan-India reserve price of Rs 11,485 crore per MHz. The last auction held in March 2015 had fetched the government record bids worth over Rs 1.1 lakh crore.

The regulator for the first time recommended auction of the premium 700 MHz spectrum in the country despite leading telcos asking the regulator to hold back the sale of radio waves in this band. The 700 MHz spectrum is considered the most efficient frequency for high-end mobile services. According to the Trai paper, the cost of delivering mobile services in the 700 MHz band is approximately 70 per cent lower than the 2,100 MHz band, which is widely used for 3G services.

For 3G spectrum in 2100 band, Trai suggested pan-India base price of Rs 3,746 crore against Rs 3,705 crore per MHz fixed by the government for the same in March 2015 auctions, which could be the second largest contributor attracting bids of about Rs 63,000 crore.

TRAI also recommended a base price of Rs 2,873 crore per MHz for pan-India 1,800 MHz frequency band-widely known as 2G spectrum. The suggested price of 1,800 MHz band is about 31 per cent higher than the base price fixed by the government for the March 2015 auctions. On spectrum held by the defence ministry, it further added that if defence shifts to the designated defence band and its assignment in all the circle is restricted to maximum 20 MHz, around 201 MHz additional spectrum can be made available for commercial purpose in 1800 Mhz band.



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