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India refuses to wait for spectrum release ahead of auctions

The Indian Telecom Commission has shot down recommendations from the country’s regulator TRAI to include an additional 4 frequency bands in next year’s spectrum auctions.

The commission has rejected the proposal on the basis that the 2.1GHz spectrum currently held by the military is unlikely to be released in time.

It also countered TRAI’s suggestion that BSNL should release 1.2MHz of 900MHz spectrum before the auction, pointing out that the state-owned operator’s licence for the airwaves in this efficient band does not expire until 2015-16.

In addition, the commission has asked TRAI to reconsider its proposed starting prices for the auction. In October, the regulator suggested setting the base prices at INR30.04 billion ($595 million) for the 900MHz band and INR21.38 billion for the 1.8GHz band.

According to estimates from Morgan Stanley, the Indian government stands to make as much as INR327 billion between two operators – Bharti Airtel and Idea Cellular - in the bidding for the 900MHz and 1800MHz frequencies.

TRAI has been calling for the auctions to be delayed until more spectrum in the 800MHz and 2.1GHz bands is released, but the commission has demanded that it submit a more feasible multi-band auction proposal. The regulator has also been asked to revise its base price suggestions, with the government stating that it intends to hold the auctions this fiscal year, selling the available spectrum.

However, TRAI has informed the Department of Telecoms that it cannot set a reserve price for the 2.1GHz band without knowing how much 3G spectrum will be made available for bidding.

 

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