Trai wants MTNL to release spectrum auction in first half of 2013

NEW DELHI: The Telecom Regulatory Authority of India today recommended that 900MHz spectrum be auctioned at least 18 months in advance to enable the winning bidders to be ready with the deployment plans..

Trai said the auction of 900MHz spectrum may be carried out in the first half of the year 2013, since the application for renewal of licenses must be made at least 30 months in advance of the expiry of licences.

In its recommendations, Trai said excess spectrum of 2x2.4 MHz should be immediately taken back from the Mahanagar Telephone Nigam Limited.

The Authority recommended that the refarming of spectrum in the 800 MHz and 900 MHz bands should be carried out progressively at an early date but not later than the due date of renewal of the licences. The spectrum available with the service providers in the 900 MHz band should be replaced by spectrum in the 1800 MHz band, which should be charged at the price prevalent at the time of refarming.

The Government must actively explore the possibility of refarming of the spectrum in the 900 MHz band immediately, by invoking the authority to change the licence conditions.

Trai said all spectrum to be assigned through the auction process in future will be liberalised - spectrum in any band can be used for deploying any services in any technology.

In a Consultation Paper issued in March, Trai had sought views on refarming of spectrum in 800/900 MHz bands, structure of auction, spectrum block size, eligibility criteria for participating in the auction, reserve price, roll out obligations, spectrum usage charges and spectrum trading.

The Supreme Court on 2 February 2012 had cancelled 122 telecom licences awarded when A Raja was Telecom Minister. It termed them illegal and asked the government to conduct fresh auctions within four months.

It had then directed Trai to make fresh recommendations for grant of licence and allocation of spectrum in 2G band in 22 Service Areas by auction, as was done for allocation of spectrum in 3G band, keeping in view the decision taken by the Central Government in 2011.

Trai had therefore issued a pre-consultation paper the next day, and then a Consultation Paper on the basis of the comments received from the stakeholders and considering the international practices.

The present recommendations are based on responses of stakeholders and open house meetings.

The government in the Budget 2012-13 has estimated that Rs. 400 billion would be raised through auction of spectrum, including the airwaves to be freed by cancellation of 122 licences following the Supreme Court order.

Apart from that for 2G services, spectrum is also available with the Ministries of Information and Broadcasting and Defence.

The Department of Telecom in an application filed before the Supreme Court had sought 400 days to complete the 2G auction process. DoT has mentioned that auctions can begin by December 20 and spectrum allocated to bidders in March next year.

In its recommendations, the Authority said the spectrum which is available in at least 75 per cent of total number of districts of the Licence Service Areas including the State capitals should be considered for allocation through auction.

The Authority said circles where the amount of spectrum in 1800 MHz band is insufficient for carrying out fully the refarming exercise, immediate steps must be taken to get the Government agencies to vacate the 1800 MHz spectrum so that the entire 900 MHz spectrum can be refarmed.

Trai:rtially modified its recommendation of the May 2010 recommendations and said for license holders of 800 MHz band spectrum should be assigned in 1900 MHz band”.

The Authority recommended that DoT should immediately arrange to allocate spectrum in the 1900 MHz band for refarming the spectrum in the 800 MHz band, The DoT should immediately carry out the interference study. The spectrum in the 800 MHz band should progressively be refarmed at the time of renewal of licences of such operators.

Trai said the auction of spectrum in 700 MHz band may be carried out at a later date, preferably in 2014 as and when the ecosystem for LTE in the 700 MHz is reasonably developed, so as to be able to realise the full market value of the spectrum.

The Authority recommends the following structure for the auction of spectrum in future:

The auction of spectrum shall be conducted using Simultaneous Multiple Round Auction (SMRA) format.

As regards the auction of spectrum in 1800 MHz and 800 MHz bands to be conducted immediately following these recommendations, it should be held in single stage.

Every auction shall be open to all those holding CMTS licence/ UAS licence / Unified licence or eligible for grant of Unified Licence. Auction shall not be open to those that hold spectrum above the prescribed cap.

If a new entity is successful, then the Authority recommends that such an entity will have to take either the National level or the State level Unified Licence, as the case may be.

In all auctions at least 5 MHz of spectrum shall be offered, except where the spectrum available is less than 5 MHz.

Spectrum shall be offered in blocks of 1.25 MHz each.

For the auction that is to immediately follow these recommendations, the amount of spectrum to be offered will follow the scheme laid out in Para 3.39 above.

The final bid price of one auction in a given band shall be the base price for the next auction whenever it takes place, with the rider that it will suitably be adjusted in the event of gap beyond one year.

The limit for acquisition of spectrum shall be 50% of the spectrum assigned in each band in the respective service area and 25%of the total spectrum assigned in all bands put together in each service area.

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