The government can rake in over Rs 6 lakh crore if it adopts the Telecom Regulatory Authority of India’s (TRAI’s) recommendation of auctioning spectrum in various bands at a base price of Rs 11,500 crore per megahertz (MHz). The recommendations propose base prices for spectrum across seven bands in the 700-2,500 MHz range.
Last year’s spectrum auctions had fetched the government about Rs 1.1 lakh crore.
In a first, the telecom regulator, which put up the recommendations for comments on Wednesday, also suggested putting the spectrum in the 700 MHz band under the hammer for commercial purposes. The spectrum, 35 MHz of which will be up for sale, can help provide 4G services and is expected to rake in about Rs 2-3 lakh crore.
Operators bagging spectrum in the 700 MHz band will have to mandatorily cover all towns and villages with a population of 15,000-50,000 within five years.
Revenues from spectrum auction can help the government deal with an already widening fiscal deficit, which will be under further pressure as soon as the recommendations of the 8th Pay Commission kick in. For customers, more spectrum will mean improved call and data services. Telcos have cited lack of spectrum who have cited lack of spectrum as one the key reasons for call drops.
“We have submitted our recommendations as asked by the Department of Telecommunications. It is for the DoT to take a call when they want to hold the auctions,” TRAI chairman RS Sharma told HT.
The regulator has fixed a base price of Rs 2,873 crore per Mhz for spectrum acrosss the country in the 1,800 MHz band, also known as 2G spectrum, 31% higher than the previous auction.
The government plans to hold the next round of spectrum auction in May-June. “The recommendations have just come in, we will examine it,” telecom secretary Rakesh Garg told HT.
“The reserve price is high and could result in undue benefits to some,” said Rajan Mathews, director-general, Cellular Operators Association of India.