TRAI recommendations on Spectrum

The authority has recommended that there should be no reservation of spectrum for the renewal licensees in 900 or 1800 MHz bands. The authority also recommends that no priority should be accorded to these licensees in the bidding process and all bidders should be treated alike.

The authority recommends that, before the upcoming auction, the DoT should come out with a clear roadmap indicating the quantum of spectrum which will be available in future along with timelines so that licensees whose licences are due for renewal in 2015/16 can take an informed decision about bidding for spectrum in the 1800 MHz band.

The authority recommends that for auction of spectrum in 1800 MHz band, the block size should be of 2×200 KHz each and the existing licensee will have to bid for a minimum of 3 blocks. A new entrant will be required to bid for a minimum of 25 blocks of 2×200 KHz each.

The authority recommends that for auction of spectrum in 900 MHz band, the block size should be 2×1 MHz with the condition that each bidder will have to bid for a minimum of 5 blocks.

All villages having population of more than 5,000 to be covered within 5 years of effective date of allocation of spectrum for access services and all villages having population of more than 2,000 to be covered within 7 years of effective date of allocation of spectrum.

The authority recommends that the feasibility of adoption of E-GSM should be explored in a time-bound manner. The authority also recommends that the auction in the 800 MHz band should not be carried out now.

3G prices from 2010 as the base or anchor price for the auction of spectrum in the 1800 MHz band.

Authority is of the view that an independent assessment of the value and reserve price for 1800 MHz spectrum is the preferred way forward.

The authority has decided that the reserve price for the forthcoming auction should be fixed at 80 percent of the average valuation.

The authority has decided to recommend fresh valuations and reserve prices for 1800 MHz spectrum in all LSAs.

The authority is of the view that rather than follow a deterministic approach, it is best to work with a probabilistic average valuation that captures the range of possible valuations that have been attempted.

The authority recommends that payment terms should be structured by the Government to address these financing issues of the bidders in the proposed auction.

The authority recommends that all spectrum allocated through auction should henceforth be charged at a flat rate.

The authority also recommends that spectrum acquired through auction or trading or on which a TSP has paid the prescribed market value to the government should not be added to any existing spectrum holdings for determining the applicable slab rate. This will also apply to spectrum allocated in the auctions held in November, 2012 and March, 2013.

The authority recommends that SUC for all auctioned spectrum should be at a flat rate of 3 percent of AGR of wireless services. This will come into effect from 1st April, 2014.

The authority  recommends that the SUC rate for BWA spectrum should also be fixed at 3 percent where services are provided under CMTS/UASL/UL (AS)/UL.

Authority recommends that the highest slab rate of SUC may be brought down to 5 percent of AGR with effect from 1st April, 2014.

Authority recommends that spectrum trading should be permitted in the country. Initially, only outright transfer of spectrum should be permitted.

Authority recommends that trading transactions should be subject to the spectrum cap of 50 percent of the spectrum in a band and 25 percent of the total commercial spectrum assigned in an LSA.

Authority recommends that a transfer fee of one percent of the transactional amount or the prescribed market price, whichever is higher should be imposed on all spectrum trade transactions. The transfer fee should be paid by the transferee to the Government.

Authority recommends that the DoT should take up the matter with RBI before the proposed auction so as to ensure that commercial banks and other lending institutions are in a position to provide loans to the telecom companies for participation in the auction.

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