Telcos to contest Trai views on auction pricing before DoT

Telecom operators will approach DoT to contest Telecom Regulatory Authority of India's (Trai's) recommendations on spectrum auctions, especially on pricing of the premium 700 Mhz band.

"We will write to DoT by the end of next week for deferring auction of 700 Mhz band and on possible errors in calculation of price of 700 Mhz band (spectrum). Trai has fixed priced based on formula given 2012. Lot of things in the industry have changed since then," Cellular Operators Association of India (COAI) Director General Rajan S Mathews told PTI.

Leading operators had requested the regulator to defer sale of 700 MHz spectrum, saying that ecosystem for providing services in this band was not developed and sale would lead to under-utilisation of the spectrum for several years and block industry's crucial fund.

Trai has recommended a record high base price of Rs 11,485 crore per Mhz for 700 Mhz alone. If all the available frequencies gets sold at Trai suggested price then it alone will yield a whopping Rs 4 lakh crore.

As per Trai's paper, the cost of delivering mobile services in 700 Mhz band is approximately 70% lower than 2100 Mhz band, which is widely used for 3G services.

The auction plan suggested by total potential revenue of Rs 5.36 lakh crore from the spectrum sale, expected to be held during May-June this year, is more than the double of gross revenues of telecom services industry. Telecom service providers had gross revenue of Rs 2.54 lakh crore in 2014-15 financial year.

Trai has used its old formula given in April 2012 spectrum price recommendation to fix price of 700 Mhz at four times of 1800 Mhz band spectrum price -- widely known as 2G spectrum.

Most of telecom operators who have purchased 1800 Mhz band in 2012 or later are using it for 4G services.

Mathews said that COAI also has objections on Trai's suggestion to reduce block size in 2300 Mhz band and 2500 Mhz band to 10 Mhz while in 2010 telecom operators like Infotel Broadband (now Reliance Jio), Airtel and Aircel were allowed to buy block of 20 Mhz.

"Government should give everyone equal opportunity. Across the world 20 Mhz block is a standard so it should be same in India," Mathews said.

Telecom operators will also raise issue of contiguous spectrum frequency in 1800 Mhz band.

"A contiguous spectrum will not only bring value for industry but also fetch good price in auctions," Mathews said.

While DoT has proposed to auction 21 Mhz of radiowave frequencies in 1800 Mhz band, Trai has suggested that on completion of harmonisation with defence it can increase to 201 Mhz spectrum in the same band.

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