Trai favours bidding for 3G spectrum allocation

In its final recommendations regarding allocation and pricing of 3G spectrum, the Telecom Regulatory Authority of India has suggested a hybrid model, comprising base price plus auction of spectrum.

The final draft of the recommendations will be submitted on Wednesday to the department of telecom, which has to decide on its adoption.

Initially, only the top five bidders in the auction will get 5 Mhz each of 3G spectrum, since only 25 Mhz is available in the first round. The base price, estimated to be around Rs 200-300 crore per operator, is the cost of reclaiming spectrum from defence services.

Following that, Trai has recommended weeding out non-serious players through auction of spectrum. Though, it will suggest safeguards so that companies do not bid astronomically to garner spectrum. Trai has not recommended extensive qualification criteria since it involves laying down specific guidelines, which could lead to litigations in future.

Regarding the band, the GSM operators are seeking 2.1 Ghz and CDMA ones 1,900 Mhz. Trai is likely to allocate both as per their demands, subject to field trials by DoT, proving that the allocation of 1,900 Mhz to CDMA operators will not interfere with the signals of GSM players. CDMA operators had said they were open to field trials, and the matter is now before the DoT.

Trai has also recommended roll-out obligations for all operators taking 3G spectrum.

DoT had on May 22 sought Trai’s recommendations of 3G spectrum pricing and allocation, following which the regulator came out with a consultation paper on June 12. After inviting comments from stakeholders and conducting open-house sessions, it held in-depth discussions with them.

Industry sources said if the government moved fast on the Trai’s recommendations, the rollout of first 3G services should happen by the beginning of the next fiscal. However, that itself will be a year behind schedule.