Indian Telecom Regulator, TRAI has released its recommendations on reserve price for auction of spectrum in the 800 MHz band. Key recommendations are as follows,
The pan-India reserve price of 800MHz is Rs26.85bn per MHz ~18% higher than the current price of 1800MHz ( Price Discovered in Feb-2014 1800Mhz Auction)
The entire spectrum holding of MTNL in the 800 MHz band (2.5MHz each in Mumbai and Delhi) and one block of 1.25MHz of BSNL in 19 circles (Pan-India except in J&K, North East and Assam) should be taken back by DoT. The entire available spectrum with DoT in the 800MHz band should be put to auction (135 blocks of 1.25MHz pan-India after surrender by MTNL/ BSNL).
At least one parcel of contiguous 5MHz spectrum should be carved out before the auction to facilitate the launch of 4G LTE – this might require reassignment of frequencies among existing TSPs in the 800MHz band.
The decision to carve out 5MHz of contiguous spectrum is positive as it would mean space for an existing TSP to launch 4G LTE on the 800MHz band (one of the efficient bands to launch 4G LTE). However, frequency reassignment could take a couple of quarters and would need cooperation from existing CDMA operators (RCom Tata DoCoMo and MTS). Also, one-time spectrum charge for excess CDMA spectrum held by RCOM and Tata DoCoMo would increase if operators accept these reserve prices.