New Delhi: Telecom regulator TRAI Thursday stood by its recommendation to price 3G spectrum at 19 percent lower than 2010 auction discovered prices and said more airwaves need to be made available in next month's sale.
"Even if high auction prices are realised because of the supply consTRAInt, the gain would be myopic. The fiscal gap would be bridged but at great cost: consumer interests would suffer, industry would not be able to find resources for further investment, and the non-performing assets of the banking sector were likely to increase," TRAI said.
TRAI on December 31 had recommended a base price of Rs 2,720 crore per megahertz for 2100 band.
However, the Telecom Commission had questioned the methodology for arriving at base rate of Rs 2,720 crore per megahertz for these airwaves, which is about 19 percent lower compared to the price paid by service providers in the 2010 auction.
In 2010, the final 3G spectrum rate paid by telecom operators was Rs 3,349.87 crore per megahertz.
In its clarifications to the Department of Telecom (DoT) regarding the 2100 MHz band, used for 3G services, TRAI said the whole purpose of clubbing the 2100 MHz band spectrum along with spectrum of other bands for auction in February 2015 will be defeated if sufficient spectrum is not made available in 2100 MHz band.
TRAI said as the Ministry of Defence (MoD) had indicated its in-principle agreement to release 15 MHz in the 2100 MHz band, this spectrum can be auctioned in February because the actual assignment of the airwaves would come very much later, towards the end of 2015.
"In the intervening period, outstanding issues between MoD and DoT could be resolved," it said.
The DoT plans to auction 5 MHz in 2100 MHz band in February and the rest 15 MHz later.
The regulator added that a split auction of 2100 MHz will "artificially increase the market price of 2100 MHz in February 2015 (auction) because of the severe supply constraint".
The regulator said :"There is no change in the reserve price for spectrum in the 2100 MHz bands from what were recommended earlier."
Inter-ministerial panel Telecom Commission is likely to take a call on the revised recommendations in its meeting scheduled for January 19 after which Cabinet will take a final call on the 3G pricing issue.
An internal committee of the DoT is believed to have suggested fixing base price of 3G spectrum at Rs 3,899 crore per megahertz, about 43 percent higher than the rate recommended by TRAI.
