India on Wednesday approved changes in policy where telecom spectrum or airwaves were allotted administratively rather than auctioned, to arrive at the market-determined price for the scarce resource. This is to facilitate sharing and trading of spectrum by players. “The most recent recommended reserve price will be taken as the provisional price, where auction-determined price is not available,” Communications and IT Minister Ravi Shankar Prasad said after a meeting of the cabinet, presided over by Prime Minister Narendra Modi.
“Subsequent to the completion of ensuing auction and with the availability of auction-determined price, the provisional price already charged will be adjusted with the auction-determined price with effect from the date of liberalization on a pro-rata basis,” he said.
The cabinet decision is based on the recommendations of industry watchdog, the Telecom Regulatory Authority of India (TRAI), and will facilitate optimal utilization of spectrum by introducing new technologies, sharing and trading, the minister said.
“A sum of Rs.1,300 crore is likely to accrue to the exchequer by this process.”
The government had already specified the norms for administratively allotted spectrum in 800 MHz and 1,800 MHz bands, and the watchdog was approached for the same on similar spectrum in the 900 MHz band. In 800 MHz, four circles had been left out. But this, too, was done end-February. During consultations, the watchdog wanted to know from the stakeholders if the liberalization of administratively-allotted spectrum in 900 MHz band should be similar to what has been spelt out by the DoT for 800 MHz and 1800 MHz band, and if such reform should be made mandatory.