TRAI projects Rs 300,000 crore from refarming -

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TRAI projects Rs 300,000 crore from refarming

Monday, 21 May 2012

The government could gain a fresh revenue bonanza as high Rs 300,000 crore from refarming of spectrum, if it goes by the telecom regulator’s latest recommendations. The reallocation of spectrum to auction its most efficient bands could turn the bands into prime wireless real estate.

The Telecom Regulatory Authority of India (TRAI) has written a letter to the secretary of the department of telecommunications (DoT) that only by refarming the government can realize true value of spectrum in the precious 900 MHz and 800 MHz bands. The Telecom Commission is likely to take a decision on refarming in its meeting on Thursday, May 24.

Currently, the old incumbent operators hold spectrum in these two bands. The TRAI has recommended that for these, the 900 and 800 MHz bands should be replaced with the 1800 MHz band and the vacated bands should be auctioned. The amount of Rs 300,000 crore could be received over four years. The TRAI has been facing opposition from industry players reluctant to pay higher prices for spectrum.

The regulator has recommended that the reserve price of spectrum in 800 MHz and 900 MHz band should be Rs 7,200 crore per MHz — double that of the 1800 MHz band. “The Authority would however like to underline that spectrum required for refarming be set aside since the value to be realized from the auction of 800 and 900 MHz spectrum is very large — of the order of Rs 3 lakh crore at the reserve price — besides involving issues of level-playing field,” said a recent letter written by TRAI secretary to DoT secretary.

Spectrum in the 900 MHz and 800 MHz bands is considered valuable as they involve lower costs in setting up infrastructure to harness the bands. Moreover, they are better suited for high speed data services. “In the present situation, we have sufficient spectrum to carry out the refarming exercise which has been accepted in principle and any failure to do so at this stage would result in our not being able to do the refarming for ever or at least for next 20 years. It would be a case of a precious opportunity lost if we were not to do the refarming at this stage,” said the letter. –The Hindustan Times

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