Monday, 11 August 2014

TRAI Is Open to Face Questions and Suggestions before Actual Auction


Spectrum
Last Thursday the telecom regulatory board had begun the much-awaited consultation process to determine the reserve prices for the radio waves mainly in the 90MHz and 1800MHzs band across the India’s 22 telecom circles.

The Telecom Regulatory Authority of India, most commonly known as Trai, has itself put forward a set of 28 important questions upon its stakeholders. It has also maintained that it will determine the process of valuing the spectrum based on the responses to these questions before determining the reserve prices for each telecom circle in another round.

It is also to be noted that the spectrum in 18 out of 22 telecom service areas for 900MHz and 1800MHz mainly used by the GSM service providers is reaching it validity expiry. Therefore, the auction is highly important for those telecom service providers as their spectrum bundled licenses are it end.

Spectrum Availability

As per the information released by the Trai, it is believed that the spectrum distribution in 900MHZ is tricky because band varies from 4.4MHz to 15.6 in different circles. Another worrying point in distribution is that the available spectrum was highly fragmented and non contiguous in nature.

DoT had placed 385MHz of airwaves in 1800MHz and 46MHz in the 900Mhz band for the eminent auction in February. Another essential thing to remember is that all available spectrum in 800MHz band is primarily used by the CDMA operators which is applicable for across all the 22 telecom service circles. This would also be place open for the auction as demanded by the MTS for long time to make it competitive and in order to create level field for new players as well.

Process

Trai expects that the stakeholders would be able to send in their comments and suggestion by September 8. These comments would be placed in the public domain to maintain the transparency in auction process. Another week would also be given to the stakeholder to make or give any counterpoints or suggestions to the received responses. Trai would also be holding up an open house to batter away the issues if any raised by the mobile operators, consumers or any other interest groups. If everything goes as planned,then government would be able to hold the auction of telecom waves by February next and the process of selecting an auctioneer would begin from Mid-August.

Estimate Yield from Auction

The official estimate of the yield from auction is over Rs. 30,000 crore.

How the Major Telecom Faring

Some of the major telecom companies are looking quite grim at the prospect of auction as their licenses are almost at its expiry and the market buzzed with multiple players vying for the same telecom service areas.

Bharti Airtel four licenses, Idea Cellular and Reliance Telecom seven licenses and Vodafone’s six licenses are up for renew in December 2015.

Block Size for Auction

The capping of the block size for auction is 1MHz for 900MHz band and 500Hz I the 1800MHz block. But there is another critical point that is whether the spectrum should be auctioned in the contiguous blocks of 5MHz each or not. This would be highly damaging for some telecom circles like Bengal where block size is 1.8 MHz in 1800MHz. If such a step is taken then the telecom services providers would be forced to close their GSM service.

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