TRAI Recommended fixing 2G License Prices at Rs 10972.45 crore

The Telecom Regulatory Authority of India (TRAI) on 9 February 2011 recommended that the price of pan-India 2G licence (that comes with contracted 6.2 MHz spectrum) be fixed at Rs.10972.45 crore. The revised price is over six times higher than the 2001 price of Rs 1658 crore that was charged from new operators in 2008. TRAI also suggested that each MHz of spectrum on pan-India basis beyond 6.2 MHz should be charged at Rs. 4571.87 crore. The earlier price of pan-India 1 MHz spectrum based on the 2001 cost was just Rs. 267.51 crore.

The revised price stands at Rs.1769.75 crore (up to 6.2 MHz) and Rs. 4571.87 crore (beyond 6.2 MHz). TRAI recommended implementation of the revised prices retrospectively from 1 April 2010.
In 2001, the lowest per MHz price of spectrum was for the West Bengal circle (Rs.16 lakh) and the highest was Rs.37.58 crore for the Tamil Nadu. In the revised prices (up to 6.2 MHz), the lowest is that of Jammu and Kashmir (Rs.7.6 crore) and the highest again is that of Tamil Nadu (Rs.187.38 crore). For beyond 6.2 MHz, the lowest is again of Jammu and Kashmir (Rs.22.89 crore) and the highest is that of Andhra Pradesh (Rs.431.95 crore).

If the recommendations do get accepted fully, the incumbents Bharti Airtel, Vodafone Essar, Idea Cellular and the state-owned BSNL will have to pay for the amount of spectrum they are holding beyond 6.2 MHz. Also the new operators who are still to get spectrum are likely to pay for whatever radio waves they would be allotted by the Department of Telecommunications.