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DoT seeks 17% increase in 2G base price over TRAI’s proposed rate

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The telecom department (DoT) will stress upon a 17 percent increase in the base price for 2G spectrum over the rate proposed by Trai.  The move will further add to the worries of mobile phone companies who were hoping that the government would dilute the recommendations of the regulator.

A DoT panel studying Trai’s proposals on spectrum auctions has concluded that reserve price for second-generation airwaves in the 1800 MHz band should be revised to Rs 4,245 crore per unit (on a pan-India basis).Trai has proposed a base rate of Rs 3,622 crore per unit.

In another step that will upset the industry, the DoT panel has also rejected the regulator’s proposal to allow mobile phone companies to stagger their payments for spectrum bagged through the bidding process. It is also of the opinion that mobile phone companies must not be allowed to mortgage spectrum to raise funds from financial institutions.

A final decision on DoT’s position will be taken at a meeting of the Telecom Commission on Thursday. This will be communicated to the Empowered Group of Ministers on spectrum, headed by Finance Minister Pranab Mukherjee, which has been tasked with the responsibility of finalising the guidelines for the auctions.

The amendments suggested by the high-powered DoT panel will come as a big blow to the telecom industry, which has lobbied hard with the government for rejecting the regulator’s recommendations.

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