India’s cabinet clears base price for largest spectrum auction

New Delhi, June 22 (IANS) India's cabinet on Wednesday cleared the base price for the country's largest spectrum auction to date, expected to fetch around $85 billion at the approved reserve price, address the menace of mobile phone call drops and give a push to 4G data communications.

The approval was given at a meeting of the cabinet chaired by Prime Minister Narendra Modi. But a decision on spectrum usage charges, which has evoked strong opinions from stakeholders, has been deferred and the matter referred again to the telecom watchdog.

"This will be the largest auction to date," Jaitley said in a press briefing later. He said since the recommendations on spectrum usage charges from the attorney general's office and the Telecom Commission came later, it was felt that the matter be referred to the watchdog once again.

"The appetite for India's telecom sector is very big," Communications and IT Minister Ravi Shankar Prasad, who also briefed the media, said, when asked if such a large auction will evoke the kind of interest which the government is hoping for.

More than 2,300 MHz of airwaves will be on the block for telecom operators in seven bands -- 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz and 2,500 MHz. Based on their pan-India reserve price the mop up can be as much as $83 billion against $17-billion the last time.

Officials said it will allow telecom operators to purchase spectrum at par with international holding values and end the spectrum shortage. The availability of such a large quantity of spectrum will give a fillip for Digital India, they added.

The telecom watchdog had recommended a pan-India reserve price of Rs 2,873 crore for 1,800 MHz, Rs 3,341 crore for 900 MHz, Rs 5,819 crore for 800 MHz, Rs 3,746 crore for 2,100 MHz, Rs 11,485 crore for 700 MHz and Rs 817 crore each for 2,300 MHz and 2,500 MHz bands.

As regards spectrum usage charge, the recommendation of the Telecom Regulatory Authority of India (TRAI) is 1 per cent for 2500 MHz and 3 per cent for all the other bands.