Reserve prices for 900 MHz spectrum too high: COAI

 New Delhi, January 8:  The reserve prices proposed by the government for 900 MHz band in the upcoming telecom airwave auction are too high, the Cellular Operators’ Association of India (COAI) said on Thursday.

“The reserve prices for the proposed auction of spectrum in the 900 MHz band in 18 service areas have been increased by 32.5 percent over the reserve prices recommended by TRAI (Telecom Regulatory Authority of India),” Indian GSM body COAI told Communication and IT Minister Ravi Shankar Prasad in a letter Thursday, a copy of which is available with IANS.

A similar letter has been sent to Prime Minister rendra Modi as well. “We would like to submit that the reserve prices for 900 MHz band recommended by TRAI were already too high, and a further escalation by 32.5 percent is completely unreasoble. Across all 18 circles where 900 MHz auction is proposed, this translates into a steep increase of Rs.4,880 crore for 5 MHz of spectrum,” said the letter written by COAI director general Rajan S. Mathews.

“We reiterate such steep increases would lead to major impact on growth and expansion of quality networks in coming years and adversely impact the consumer as well tiol vision of faster broadband for all and Digital India initiatives,” said Mathews in the letter. In December 2015, seven licences each of Idea Cellular and Reliance Communications, four licences of Bharti Airtel and six licences of Vodafone will complete their 20–year term after which they should be renewed. The cabinet on Monday approved the proposal of the Department of Telecom (DoT) to proceed with auction in 800, 900 and 1800 (mega hertz) MHz bands and filised its reserve prices.

“The reserve price approved is Rs.3,646 crore pan–India per MHZ in 800 MHz, Rs.3,980 crore for 900 MHz band pan India excluding Delhi, Mumbai, Kolkata, and Jammu and Kashmir; Rs.2,191 crore pan India (excluding Maharashtra and West Bengal) in 1800 MHz band,” an official statement said. The quantum of spectrum to be put to auction is 103.75 MHz in 800 MHz band in all service areas, 177.8 MHz in 17 licence service area (LSA) in 900 MHz band and 99.2 MHz in 15 LSAs in 1800 MHz band. Thus a total of 380.75 MHz in 800, 900 and 1800 MHz is being put to auction, it added. The estimated revenues from this auction are Rs.64,840 crore (excluding 2100 MHz spectrum) of which Rs.16,000 crore is expected to be realized in the current fincial year (2014–15). (IANS)