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TRAI sticks to its recommendation of steep cut in spectrum auction

24 Oct 2013 Evaluate

In a move that can cheer the telecom companies, the Telecom Regulatory Authority of India (Trai) has stuck to its recommendations for steep cuts in the floor price of spectrum for upcoming auctions as well as on spectrum refarming. The regulating body refused to make any changes to its earlier recommendation of lower prices for the fresh round of spectrum auctions and rebuffed a reconsideration suggested by the Department of Telecom (DoT). Also, the regulator stuck to its stand of not calling for new auctions in the 800 MHz band, used by CDMA operators. Trai said it had computed the price assuming it would be liberalised, meaning it would be used to offer any kind of telecom service and called its recommendations vital to revive the sector’s health.

Trai, which had been tasked by the government to work out fresh floor prices after auctions in November last year and March this year, had in September recommended about 37 percent cut in base price for 1800 Mhz spectrum band compared to the reserve price in the previous auction and running up to as high as 60% for 900 Mhz key circles in Delhi, Mumbai and Kolkata. The regulator had not recommended any price for 800 mhz band which is used for CDMA services and had also suggested that no spectrum be reserved for incumbents while refarming of the 900 mhz band.

The DoT committee, which had referred the matter back to Trai, is now studying the clarifications and is likely to submit its report in the next few days. Finally, the Telecom Commission, the highest decision-making body of the Department of Telecommunications (DoT), will take a decision on the TRAI proposals and clarifications at its meeting likely to be held October 29.

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