Last month, regulator Trai had recommended a reserve price of `7,860 crore for 5 MHz of spectrum in the 1,800 MHz band for pan-India operations. This is 46% lower than the reserve price fixed during the first auction held in November, 2012.
While pointing out that there was no clarity on various assumptions taken by Trai in calculating the reserve price, the committee said the government received bids for all the circles in all service areas except Delhi, Mumbai, Karnataka and Rajasthan in the first auction. “It can not be said that this was not in accordance with their business case,” said the report.
Interestingly, when Trai made its recommendations, Arvind Bali, CEO of Videocon Telecommunications Ltd, had raised objections and demanded that the company be compensated in case the regulator’s recommendations were accepted.
Videocon had participated in last November’s auction.
The committee has also objected to the recommendation to raise annual usage charge on spectrum to 3% from the existing 1% for 4G operators.