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TRAI Announces 5G Spectrum Pricing, Recommendation for Next Auction

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Telecom regulator TRAI has recommended rules and prices for the next round of spectrum auction which will include radiowaves for 5G mobile services. The regulator has recommended that base price for bidding should be higher of the two figures – 80 percent of the average valuation of spectrum band in the licensed service area or the price realised in the October 2016 auction.

The government is yet to finalise the timing of the next round of auction. The regulator has recommended base price of Rs. 3,285 per megahertz for 1800MHz band on pan-India basis.

For the 5G spectrum, it has issued recommendations for the proposed spectrum in 3300-3600MHz band and suggested that “reserve price of 3300-3600MHz band should be equal 30 percent of the reserve price of 1800MHz FDD band”. It has suggested that spectrum in 3300-3600MHz band should be put up for auction in the block size of 20MHz.

“To avoid monopolisation of this band, there should be limit of 100MHz per bidder. Since the TSPs are allowed to trade their partial or complete spectrum holding to another TSP, the limit of 100 MHz spectrum in 3300-3600 MHz band, shall also apply for spectrum trading,” TRAI said.

In a relief to the industry, the Telecom Regulatory Authority of India has suggested that the “reserve price of 700 MHz band should be equal to 2 times of reserve price of 1800MHz spectrum band” resulting in about 42 percent reduction in price of this band at Rs. 6,568 crores per MHz.

For 2016 auction, government had fixed base price of 700MHz band at Rs. 11,485 crore per MHz. The price of spectrum in premium 700MHz band was fixed at four times the price of 1800MHz band – a frequency range which was famous as 2G spectrum earlier.

In 2016, spectrum worth about Rs. 4 lakh crore was put up for auction but there were no takers for this band due to its high price. The regulator has recommended reduction of price in telecom circles where spectrum remained unsold in last auction of 2016.