New Delhi, Oct. 3: The Telecom Commission has sought clarification from sectoral regulator Trai on its recommendation of a sharp cut in the spectrum base price, raising doubts over the auction of the scarce resource.
“We have sought further clarifications on some issues. It would be sent back to Trai for clarifications. But, it does not mean that we did not agree with anything,” said M.F. Farooqui, secretary in the department of telecom (DoT) and chairman of the Telecom Commission.
Trai has been asked to clarify on what basis it has zeroed in on the reserve price.
The Telecom Commission will take the final decision on October 29 after taking into account Trai’s reply.
Among other key issues, the commission has asked Trai to recommend the reserve prices for spectrum in the 900MHz and 800MHz bands.
“We would like auction to be conducted in a manner that is successful,” he said, adding that the government targets to auction spectrum in the 1800MHz, 900MHz and 800MHz bands together by January and expects to garner Rs 11,343 crore. However, 900MHz spectrum will only be auctioned in Delhi, Mumbai and Calcutta circles.
Trai had recommended a reduction in the pan-India reserve price of 1,800MHz spectrum by 37 per cent to Rs 1,496 crore per MHz and up to 60 per cent for 900MHz in Delhi (at Rs 288 crore), Mumbai (at Rs 262 crore) and Calcutta (at Rs 100 crore).
The Telecom Commission has also questioned Trai’s proposal to fix a uniform spectrum use charge (SUC) at 3 per cent of the adjusted gross revenue.
“We need to examine this from the point of view of revenue neutrality. We have asked Trai to also refer to the notice inviting applications that was issued by the government earlier. We need to examine the basis of slab-based SUC with these references. We also need to see whether it is legally tenable,” Farooqui said.
Trai has suggested that there should be no auction of spectrum in the 800MHz band used by CDMA operators because there was no demand for it last year.
The Centre has to conduct the third round of auction following a Supreme Court order directing the auction of the radiowaves freed following the cancellation of 122 2G licences in February 2012.
Another round of auction for the 900MHz will have to be conducted as some of the airwaves in this band are held under the old licences, which will expire after November 2014.