TRAI's spectrum price recommendations evoke mixed reactions

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TRAI's spectrum price recommendations evoke mixed reactions
Telecom Minister Kapil Sibal Tuesday welcomed TRAI recommending the reduction in spectrum base prices for the upcoming auction while industry body COAI demanded still lower rates.

"We are very happy by and large with the positive nature of the recommendations they are industry friendly and recognise the ground reality of the market not only will government get its revenue but market will also be able to purchase spectrum at reasonable prices," Telecom Minister Kapil Sibal told reporters.

The Minister also hailed the regulator's suggestion of allowing trading of spectrum acquired through auction. "The one very positive recommendation of TRAI is that they have in-principle said there should be spectrum trading," he said.

GSM industry body COAI said the reserve price could have been lower. "We believe TRAI is going in the right direction but we think what TRAI has set as the reserve price is close to the market price of 1800 MHz and as per international standards, the reserve price should be 30 per cent of the market price," COAI Director General Rajan S Mathews told PTI.

He, however, said the biggest miss in the recommendations is spectrum refarming, which puts the incumbent operators in a high risk proposition. There is no provision for the existing players wherein they can retain some amount of spectrum in the 900 MHz band, Mathews said. "This is a high risk proposition for the incumbents," he added.

Videocon said the recommendations reconfirm the fact that the reserve price fixed for the November 2012 auction was wrong and those who bid have paid prices which are exorbitantly high. The company said there is every possibility that the successful bid price of the spectrum in the current auction may not even touch the reserve price of the November auction.

"We strongly recommend that the excess money paid by us i.e difference between the price paid by us and the successful bid price of the upcoming auction should be refunded back to us either in monetary terms or through additional spectrum," Videocon Mobile Services Director and CEO Arvind Bali said.

The Telecom Regulatory Authority of India (TRAI) suggested a pan-India reserve price of Rs. 1,496 crore per MHz in the 1800 band, down from the base price of Rs. 3,640 crore in the previous auction.

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