India’s telecoms regulator on Friday reiterated its view that spectrum in the 2.1-GHz band earmarked for 3G services should be sold at significantly lower prices than those sought by the Department of Telecommunications (DoT).
In a recommendation document sent to the DoT, the Telecom Regulatory Authority of India (TRAI) stood by its early proposal that the base price for pan-Indian 2.1-GHz spectrum due to be included in next month’s auction should be set at 27.2 billion rupees (€375 million) per MHz. By contrast, the DoT is keen to match the base price to the previous 2.1-GHz sale in 2010, which came in at INR33.5 billion.
"These are now four year old auction prices," the TRAI noted.
"The [TRAI] has been of the consistent view that a reserve price should not be fixed too close to the estimate of valuation, so as to encourage participation, enable competitive bidding and lead to price discovery," the regulator said. As such, it rec ommends that the reserve price be set at 80% of the average valuation of the spectrum.
The TRAI also called for all the available 2.1-GHz spectrum to be auctioned at once, rather than a split process suggested by the government.
India’s defence ministry is due to free up 15 MHz of 2.1 GHz airwaves, but it will not all be ready by the February auction.
"A split auction of 2.1 GHz…will artificially increase the market price of 2.1 GHz in February 2015 because of the severe supply constraint," the TRAI said.
It proposes that all the spectrum be sold at the same time, regardless of whether it is immediately available for use.
Finally, the TRAI reasserted its position that no operator should be permitted to bid for more than two blocks of spectrum in an area with three or four blocks up for grabs. It also pointed out that it is the responsibility of the DoT to ensure that the spectrum being sold is free from interference, or to provide information about any likely interference to the bidders to enable them to make informed decisions.
