New Delhi:
Telecom regulator - Telecom Regulatory Authority of India (TRAI) today proposed a steep minimum price for auction of 2G telecom spectrum, setting off fears of a hike in mobile phone tariffs which are at present among the cheapest in the world.
The regulator, whose recommendations are not binding on the government, valued 2G spectrum at about Rs 7 lakh crore, nearly seven times more than Rs 1.04 lakh crore that the government had received through auction of 3G spectrum in 2010.
The price set is around 10 times more than what companies such as Unitech Wireless, Swan Telecom and Shyam Telecom paid for 4.4 MHz of all-India spectrum in 2008, the floor price at which the former Telecom Minister A Raja had allocated spectrum and telecom licenses.
The TRAI proposed a minimum or base price of Rs 3,622.18 crore for every mega Hertz of spectrum in the 1800 MHz band, where radio airwaves have been freed after the Supreme Court cancelled all mobile permits issued by the then Mr Raja.
TRAI has recommended a reserve price for 800 Mhz (used for CDMA service) and 900 MHz bands (used for GSM service) at least 2 times higher than that of minimum price for 1800 MHz band.
A pan-India spectrum in 1800 MHz band will cost Rs 18,000 crore. The reserve price is several times the base price of Rs 3,500 crore for 3G spectrum auction.
TRAI has also recommended that auction should be open to all companies except those having a more than prescribed limit of spectrum, potentially disqualifying incumbents like Airtel, Vodafone and BSNL.
Telecom operators were naturally not happy with the recommendations with some even mulling legal action on the grounds that the regulator had exceeded its brief.
Expressing concern at TRAI recommendation, Vodafone said: "We believe that several of these recommendations are retrograde and if accepted, will do irreparable harm to the industry."