TRAI recommends 6-fold hike in price of start-up 2G spectrum

NEW Delhi, February 9 (PTI): In a development that has huge financial implications for existing as well as new operators, telecom regulator TRAI has recommended fixing the price for 6.2 Mhz of pan-India start-up 2G spectrum at Rs 10,972.45 crore, more than six times the present cost of Rs 1,658 crore. In its recommendations to the Department of Telecom (DoT), TRAI has also said that every Mhz of additional spectrum (on an all-India basis) beyond the contracted limit of 6.2 Mhz would cost a massive Rs 4,571.87 crore.
Most of the telecom firm, including Bharti, Vodafone, Idea and state-owned companies like BSNL and MTNL, hold extra spectrum beyond 6.2 Mhz and the new norms would put a huge financial burden on these telcos. In addition, the licences of some of the operators, including Bharti, are due for renewal after completing 20 years periodicity in several circles. Such companies would have to pay to renew their licences as per the new norms recommended by TRAI. When contacted, TRAI chairman J S Sarma said, “Yes we have submitted the recommendations to the DoT on the revised norms for 2G spectrum pricing.”
According to the report, the spectrum prices for both categories -- up to 6.2 Mhz and beyond 6.2 Mhz -- vary from circle to circle. In the category of up to 6.2 Mhz of spectrum, the prices of one Mhz varies from Rs 7.60 crore in the case of Jammu and Kashmir to Rs 187.38 crore in the case of Tamil Nadu. In the category of beyond 6.2 Mhz of spectrum, the price varies form between Rs 22.89 crore per Mhz in Jammu and Kashmir to a maximum of Rs 431.95 crore in Andhra Pradesh. The revised prices recommended by TRAI are effective from April 1, 2010, the report said.