An internal panel under the Department of Telecommunications (DoT) has rejected recommendations made by the Telecom Regulatory Authority of India (TRAI) pertaining to the spectrum auctions to be held in February 2015.

According to the committee, for the 1800 MHz spectrum band, the same approach should be used for calculating the reserve price of spectrum, as was used for arriving at reserve price for February 2014 spectrum auctions.  TRAI in its recent recommendations has suggested about 10 per cent higher base price than what was received in February auction. The committee has found that by using the method suggested by TRAI, the base price of spectrum across some circles comes out to be 3-20 per cent higher as compared to the rates suggested by the regulator.

The internal committee has also rejected TRAI’s recommendation to conduct the next round of auction only after ensuring the availability of spectrum. As per TRAI, the amount of spectrum being put up for auction is less than the 2G spectrum currently being used by operators whose licences are due for renewal. TRAI in its recommendations had suggested that the government should ask defence forces to vacate spectrum in the 2100 MHz band while request Bharat Sanchar Nigam Limited (BSNL) to surrender 1.2 MHz spectrum in the 900 MHz band, to make fresh spectrum available for mobile services. However, the DoT panel has rejected these proposals on grounds that while the defence will take time to vacate spectrum, asking BSNL to surrender airwaves may have legal implications.

The views of the DoT panel along with the recommendations of TRAI will be put before the Telecom Commission for a final decision.

The next round of spectrum auction is proposed to be held in February 2015. The government is estimated to raise at least Rs 93.55 billion in revenues from the sale of airwaves. At present, licences of operators in 11 circles are due for extension in 2015-16. If spectrum is not bought back, the operators face the risk of business disruption, including potential closure.