TRAI may call for auction of 2G spectrum over 6.2 Mhz | business | Hindustan Times
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TRAI may call for auction of 2G spectrum over 6.2 Mhz

Telecom regulator TRAI is likely to recommend the auction route for distribution of 2G spectrum beyond 6.2 Mhz to operators and suggest scrapping of the current practice of giving radio waves on the basis of the number of subscribers.

business Updated: May 11, 2010 09:15 IST

Telecom regulator TRAI is likely to recommend the auction route for distribution of 2G spectrum beyond 6.2 Mhz to operators and suggest scrapping of the current practice of giving radio waves on the basis of the number of subscribers.

TRAI is releasing its recommendations on the contentious issues of 2G spectrum allocation and pricing today. The 2G spectrum allocation is a burning issue as there have been allegations of under-pricing of radio waves. The skyrocketing bid of 3G spectrum has only added to this controversy.

Sources said adopting the auction route for allocation of radio waves beyond 6.2 Mhz will enable a level-playing field and help spare litigation, as new operators will be able to get start-up spectrum of 4.4 Mhz along with a licence, for Rs 1,651 crore, which was the same price paid by existing cellular companies.

If the proposal is implemented, new operators like Uninor, Etisalat and Loop Telecom, which already have 4.4 Mhz of 2G spectrum, may have to buy spectrum beyond 6.2 Mhz. For allocation of spectrum between 4.4 and 6.2 Mhz, TRAI would take a decision based on the new criteria such as quality of service and stipulated network roll-out.

Existing players like Bharti Airtel, Vodafone Essar and Idea Cellular, which have spectrum beyond 6.2 Mhz, could then have to pay for the extra spectrum held from a prospective date, which would be the date of implementation of the new policy and not the date of holding the spectrum, thus lessening their financial burden.

The formula for calculating the cost per Mhz spectrum before auctions would be worked out by TRAI and DoT, in consultation with the Finance Ministry.

The government has put allocation of 2G frequencies on hold since March 2009, until the DoT comes up with a pricing and disbursement formula based on a DoT recommendations. TRAI was asked to study the spectrum panel’s report and issue recommendations on the new methodology to be adopted to award 2G airwaves.

The panel was set up following allegations of under-pricing of 2G spectrum. India is the only country which follows the controversial practice of allocating spectrum based on an operator's customer base.