Start-up 2G spectrum price: TRAI moots 6-fold hike

NEW DELHI, INDIA: The Telecom Regulatory Authority of India (TRAI) has reportedly recommended fixing the price for 6.2 Mhz of pan-India start-up 2G spectrum at Rs 10,972.45 crore, more than six times the present cost of Rs 1,658 crore, which would have huge financial implications for existing as well as new telecom operators.

In its recommendations to the Department of Telecom, TRAI has also said that every Mhz of additional spectrum (on an all-India basis) beyond the contracted limit of 6.2 Mhz would cost a massive Rs 4,571.87 crore, said a PTI report.

Most of the telecom firm, including Bharti, Vodafone, Idea and state-owned companies like BSNL and MTNL, hold extra spectrum beyond 6.2 Mhz and the new norms would put a huge financial burden on these players, it added.

Confirming the report TRAI chairman J S Sarma told PTI that the regulator has submitted the recommendations to the DoT on the revised norms for 2G spectrum pricing. According to the report, the spectrum prices for both categories — up to 6.2 Mhz and beyond 6.2 Mhz — vary from circle to circle.

TRAI's proposals to the government come in the wake of a scandal involving cheap issue of licences and mobile spectrum in 2007-08 that a state auditor estimated New Delhi may have lost up to $39 billion in potential revenue.

India is also overhauling its decade-old telecommunications policy and will separate 2G radio spectrum that now comes free with telecoms licences and ask companies to pay for spectrum based on a market-linked price.