DoT may retain old base price for next 2G spectrum auction

The Department of Telecommunications (DoT) is looking at benchmarking the spectrum price for the next 2G spectrum auction to the February 2014 base price instead of the discovered price which is much higher.

According to the sources, the proposal is under consideration as otherwise the reserve price, for the auction scheduled for February 2015 would get pushed up too high and could result in a tepid response from telcos as had happened earlier.

Top DoT officials said the proposal worked out earlier, where the new discovered price would be the base price for next round of spectrum auctions cannot be sacrosanct.

"We would need to work it out as telcos had bid almost 27 per cent higher than the base price of the spectrum during the last auction in February 2014. Let Telecom Regulatory Authority of India (Trai) first come out with its price recommendations. We don't expect much increase in the base price as telecom industry is not in very good shape," said an official requesting anonymity. The government plans to auction 184 MHz of 900 MHz band and 104 MHz in 1800 Mhz band of spectrum in the upcoming auction.

Trai is expected to come out with its recommendations on new base price of 900 and 1800 MHz for February 2015 auctions later this month. The auction will be across 18 out of the 22 telecom circles. During the last auction of 900 MHz band and 1800 Mhz band of spectrum in February 2014, the government had received total bids worth Rs 61,092 crore, which is about 27 per cent more than the base price valued at Rs 47,934 crore.

While Trai in September 2013 recommended a sharp 60 per cent and 37 per cent cut in base price of 900 and 1800 MHz spectrum bands respectively, the EGoM in November 2013 had increased the base price of the two spectrum bands by 25 per cent for the February 2014 auction.