TRAI has suggested a base price of Rs 6,568 crore per MHz of radio waves in 700 MHz band.
The Department of Telecommunications (DoT) will seek the Cabinet’s approval for the allocation of excess airwaves in the premium 700 MHz band worth Rs 65,000 crore to the Railways.
“The Telecom Regulatory Authority of India (TRAI) had earlier recommended the auction route for the allocating 700 MHz premium spectrum to the Railways. Therefore, instead of asking the regulator to review those suggestions, we would seek its comments before approaching the Cabinet for its approval,” a senior official told.
The Digital Communications Commission (DCC) had directed the DoT to seek views from Trai on the allocation of 700 MHz premium spectrum to the Railways for signaling purposes without auction. The radio waves in 700 MHz band are considered a premium for long-distance mobile communications as they require less number of mobile towers to provide services compared to 3G and 4G services.
The difference between TRAI reviewing its recommendation or sending its views on the allotment to the DOT is essentially the time taken. While the former is a long-drawn process and may take months, the latter can be done in lesser duration. “The review process is a lengthy one as before reviewing its suggestions on the spectrum allocation for any band, Trai will have to seek stakeholders’ approval, which will take months and not weeks,” said the official.
The Railways has asked for 10 MHz of spectrum in 700 MHz band for setting up a public safety and security service. Trai has recommended a base price of Rs 6568 crore per MHz of radio waves in 700 MHz band, implying the total value of airwaves at Rs 65,680 crore at the reserve price.
The frequency band is earmarked for mobile services and allocating it to the Railways for non-commercial use may adversely impact levies like adjusted gross revenue, spectrum usage charges and license fee.
In its recommendations in August last year, the regulator had slashed the price of 700 MHz by 42 percent to Rs 6568 crore per MHz.
The same 700 MHz band spectrum remained unsold in the 2016 auctions when Trai had fixed a base price of Rs 11,485 crore per MHz.―The Smart Investor