Trai stands by its proposal for cut in auction reserve price

The Telecom Regulatory Authority of India (Trai), headed by Rahul Khullar, has snubbed the Department of Telecommunications (DoT) by sticking to its stand of slashing the reserve price of mobile phone spectrum by up to 60 per cent in the 900 Megahertz (MHz) band in some key cities for the forthcoming third round of auction.

Trais had also suggested 37-per cent cut in the reserve price for spectrum in the 1800 MHz band.

A DoT committee headed by telecom secretary M. F. Farooqui, had asked Trai to reconsider its recommendation.

However, Trai has reiterated its approach for calculating the reserve price stating that "the methodologies used by the Authority are grounded in economic theory and have widespread international acceptance". DoT was of the view that the valuation did not appear to reflect the value of the liberalised spectrum, which has a much greater potential than 2G over the next 20 years. "Deviation of various constants, co- efficient and variables to arrive at the reserve price under different approach appears to be based on certain assumptions on which no clarity could emerge from recommendation," the panel had said.

Trai termed DoT's observation as "puzzling" and stated that assumptions, data sources and methodology adopted in calculating the value of spectrum under different approaches have been clearly explained. On DoT's request to provide reserve price of 900 MHz spectrum in remaining 19 circles, Trai said, "Once again, the observations are puzzling and erroneous," it said.

Courtesy: Mail Today