TRAI has released consultation paper [PDF] on the auction of the scam tainted spectrum earlier allotted to 122 licensees. There is a wide range of views given the number of stakeholders involved and hence no conclusive recommendations at this stage. Key issues discussed in the Consultation Paper are as follows,
Reserve Price of Spectrum The price of Rs 1650 Cr for 6.2MHz recommended by few companies involved in the 2G scam has been overruled by TRAI and is ir-relevant. TRAI has also once again highlighted other price point comparisons (these were announced in its past recommendations in May 2010 and Feb 2011) and the range begins at Rs.818cr ($165mn) per Mhz up to Rs.4,571cr ($900mn) per Mhz which was recommended as the price for spectrum held above 6.2Mhz. Other price points for bench marking include Rs.1,769cr ($350mn) per Mhz, which is the price for spectrum under 6.2Mhz and the 3G price of Rs.3,350cr (~$700mn) per Mhz.
Who can Bid in the 2G Auction + Structure Should all players (i.e. those whose licenses were cancelled and
incumbents) be allowed or should it be limited to those with canceled licenses only? Another view is to conduct it through multiple phases, with the first / initial phase restricted to new licensees only.
Spectrum Re-Farming The initial proposal of refarming at the time of license renewal was because there wasn’t sufficient spectrum in the 1800Mhz and TRAI believes this may still be the case. Another view has been to ask operators to return this spectrum simultaneously (i.e. irrespective of when their license is up for renewal) – this could be the ‘cleanest’ way to implement it, but would also means spectrum refarming could occur sooner than later.
700Mhz 4G LTE Band Auction Should they allow only operators who don’t have 800/900 MHz spectrum to participate or open it to all? If they don’t allow players with 900Mhz, it could mean many of the incumbents will not be able to participate. TRAI is insane or what ? The best use of this will be by incumbents to carry heavy traffic.
Spectrum Usage Charges Various stakeholder view is to reduce it to – (i) recover the administrative cost only; or (ii) nominal rate, say 1% of the AGR.
Hopefully, TRAI & DoT will conduct the Auction responsibly. Anyway, if they are against the interest of the State, PIL will be filed blocking the same.