The much-awaited 3G spectrum allocation and pricing recommendations by TRAI was declared on September 27 with the telecom regulator supporting auction of spectrum above a base price. TRAI also recommended spectrum allocation for Broadband Wireless Access (BWA) services like WiMax, clearing the rollout of alternative technologies to 3G.
TRAI recommended the base price for acquisition of spectrum for 3G services at Rs 80 crore for Category A circles (Delhi and Mumbai), Rs 40 crore for Category B circles (Chennai and Kolkata) and Rs 15 crore for Category C circles.
TRAI estimated the revenue accrued to the government from the base price to be only around Rs 1,500 crore for 3G and BWA services.
Broadband Wireless Access services have also been given high priority in TRAI’s recommendations, thus making spectrum allocation technology-neutral. The telecom regulator has identified 200 MHz of spectrum in 3.3-3.4 GHz and 3.4-3.6 GHz bands to about 13 carriers. BWA services include WiMax, WiBro, Flarion, iBurst, RipWave, and IPWireless, and similar other potential technologies.
TRAI has also recommended constitution of National Frequency Management Board (NFMB) to provide long-term vision and planning for spectrum availability and its efficient usage. Stiff penalty for de-hoarding and non-compliance of rollout obligations has also been suggested.
If operators do not achieve their rollout obligations, they might be fined a spectrum hoarding cess of 2.5 per cent of their winning auction bid (that is, their spectrum acquisition price) per quarter in the next year. If the operators do not complete their rollout obligations within this one year, their spectrum assignments could be cancelled and the spectrum re-allocated to a new operator.
The regulator has requested the Department of Telecommunications (DoT) for immediate resumption of unused spectrum so that additional spectrum was available in the 800 MHz band for the growth of CDMA services.
TRAI also recommended that DoT granted a one-year moratorium on incremental annual spectrum fees for 3G spectrum from the time of spectrum assignment. After this one year, DoT should charge operators an additional annual spectrum charge of 1 per cent of the operator’s total annual gross revenue, the telecom regulator held.