TRAI fixes base price for a unit of 3G at Rs 2,720 cr

New Delhi: The Telecom Regulatory Authority of India (TRAI) has fixed the base price at Rs 2,720 crore for a unit of 3G spectrum.

The government will receive one-third of this amount in the current fiscal and the rest will be distributed over the next few years.

The government's deficit in the first eight months of the fiscal has almost reached its annual target but the finance ministry had accounted for generating Rs 45,000 crore via telecom auctions and revenue share while doing the necessary calculations.

The Department of Telecommunications (DoT) is set to auction 2G frequencies in the 800 Mhz, 900 Mhz and 1800 Mhz bands the next month. While the department was wasn’t willing to simultaneously sell 2G and 3G airwaves initially, it has toned down its position after protests from telcos and TRAI.

DoT officials have indicated the Centre would auction some 3G spectrum in February along with 2G frequencies without specifying the amount. It is expected that on a pan-India basis almost 400 Mhz of fresh airwaves — 60 Mhz in 2G and 330 Mhz in 3G — would be put up for sale along with around 180 Mhz of existing airwaves currently in the possession of telcos that will also be re-auctioned.

The telecom regulator said it had been informed by the defence ministry about its agreement to swap 15 Mhz (per circle) of 3G airwaves with spectrum in the 1900 Mhz held by DoT.

In a multi-band auction, the government could look at generating up to $8 billion (Rs 50,400 crore) in revenue proceeds from 3G alone, and around $9 billion (Rs 56,700 crore) from 2G airwaves in the 1800 Mhz and 900 Mhz bands, used by GSM telcos. In addition, the government would generate revenue from selling spectrum in the 800 Mhz band, which is typically used by CDMA service providers.