Lok Sabha Question No. 1846 (UNSTARRED), answered on 2016-03-09
Subject: Auction and Pricing of Spectrum
Ministry: COMMUNICATIONS AND INFORMATION TECHNOLOGY
Asked by: B.V. NAYAK, RAM CHARITRA, JAYADEV GALLA

## GOVERNMENT OF INDIA

## MINISTRY OF COMMUNICATIONS AND INFORMATION TECHNOLOGY DEPARTMENT OF TELECOMMUNICATIONS

## LOK SABHA

UNSTARRED QUESTION NO.1846

TO BE ANSWERED ON 9 TH  MARCH,  2016

## AUCTION AND PRICING OF SPECTRUM

1846. SHRI B.V. NAIK: SHRI RAM CHARITRA NISHAD: SHRI JAYADEV GALLA:

Will  the  Minister  of  COMMUNICATIONS  AND  INFORMATION  TECHNOLOGY be pleased to state:

- (a) whether there has been a complaint regarding shortage of airwaves and if so, the details thereof;
- (b) whether Telecom Regulatory Authority of India (TRAI) has made any recommendations with regard to pricing and auction of spectrum;
- (c) if so, the salient features thereof, band-wise and the response of the Government thereto;
- (d) whether the Government has issued guidelines to liberalize the administratively allotted  2G  spectrum,  allowing  operators  to  offer  latest  mobile  services  including  4G using the same radio waves and if so, the details thereof; and
- (e) whether the spectrum will be liberalized for the remaining period of the license held by the telecom operator and if so, the details thereof ?

## ANSWER THE MINISTER OF COMMUNICATIONS AND INFORMATION TECHNOLOGY

## (SHRI RAVI SHANKAR PRASAD)

- (a)  The  representations  have  been  received  regarding  shortage  of  spectrum  from Cellular  Operator  Association  of  India  (COAI),  Soft  Bank  etc.  The  Cellular  Operators Association  of  India  (COAI)  sent  a  communication  in  October,  2015  mentioning  the need to make more spectrum available in various bands to meet the increasing data requirement and quality of service expectations of subscribers. Further the COAI has requested for auction of sufficient spectrum in 2100 MHz, harmonisation and auction of 1800 MHz band as well as auction of 2300 MHz, 2500 MHz and spectrum becoming available due to expiry of licenses upto September/October, 2017. The Soft Bank has also  sent  a  communication  in  November  2015  mentioning  about  making  ample spectrum available for telecom services, avoid fragmentation of spectrum etc.
- (b) & (c) The Telecom Regulatory Authority of India (TRAI) has made recommendations on 'Valuation and Reserve Price of spectrum in 700, 800, 900, 1800, 2100,  2300  and  2500  MHz  bands'  dated  27.01.2016.  The  salient  features  of  the recommendations are at Annexure-I. These recommendations are under consideration.
- (d) & (e) The guidelines for liberalisation of administratively allotted spectrum in 800 MHz and 1800 MHz frequency bands have been issued in November 2015. The details are attached at Annexure-II. As per the Guidelines dated 5.11.2015, the spectrum will be required to be liberalised for the balance validity period of right to use the same after payment of auction determined price prorated for the balance validity period.

## Annexure-I

## Salient Features of the TRAI Recommendations dated 27.1.2016

- (i). APT700 band plan should be adopted for the 700 MHz (698-806 MHz) spectrum band  with  FDD  based  2x45  MHz  frequency  arrangement.  Entire  available spectrum  (2x35MHz)  in  the  700  MHz  band  should  be  put  to  auction  in  the upcoming auction.
- (ii). DoT should carry out carrier re-assignment exercise in the 800 MHz band at the earliest and ensure that entire spectrum that is available for commercial use is put to auction.
- (iii).  DoT, in coordination with Defence and the TSPs, should complete the harmonization process in the 1800 MHz band before upcoming auctions so that the  entire  spectrum  that  is  made  available  due  to  this  exercise  is  placed  for bidding.
- (iv).  The  existing  provision  of  a  cap  of  25%  of  the  'total  spectrum  assigned'  in 700/800/900/1800/ 2100/2300/2500 MHz bands and 50% within a given band in each of the access service area shall apply for total spectrum holding by each TSP.
- (v). Roll-out  obligations  for  700  MHz  band:  All  towns/villages  having  population  of 15,000 or more but less than 50,000 to be covered within 5 years of effective date  of  allocation  of  spectrum  for  access  services  and  all  villages  having population of 10,000 or more but less than 15,000 to be covered within 7 years of effective date of allocation of spectrum.
- (vi).  900 and 1800 MHz bands should be treated as separate bands for the purpose of roll-out obligations if a licensee deploys different technologies in these bands.
- (vii).  The same eligibility criteria that have been made applicable for other bands viz. 800 MHz, 900 MHz, 1800 MHz and 2100 MHz band in January 2015 NIA should be  made  applicable  for  2300  MHz  and  2500  MHz  bands.  The  same  eligibility criteria should also be made applicable for 700 MHz band also.
- (viii).  The guidelines of liberalisation of administratively allotted spectrum in 900 MHz band should be similar to what has been spelt out by DoT for 800 and 1800 MHz band.
- (ix).  Audit for all allocated spectrum both commercial as well as spectrum allocated to various PSUs/ Government organizations. This should be done by an independent agency.
- (x). Recommended Reserve Price for various spectrum bands is as per table given below:

| LSA              |   700 MHz | 800 MHz   | 900 MHz   |   1800 MHz |   2100 MHz |   2300 MHz |   2500 MHz |
|------------------|-----------|-----------|-----------|------------|------------|------------|------------|
| Delhi            |      1595 | 848       |           |        399 |        554 |        143 |        143 |
| Mumbai           |      1192 | 727       |           |        298 |        461 |        146 |        146 |
| Kolkata          |       596 | 160       |           |        149 |        116 |         33 |         33 |
| Andhra Pradesh   |       971 | 606       |           |        243 |        272 |         68 |         68 |
| Gujarat          |       952 | 285       | 673       |        238 |        258 |         39 |         39 |
| Karnataka        |       740 | 303       | 558       |        185 |        328 |         98 |         98 |
| Maharashtra      |      1272 | 799       |           |        318 |        341 |         58 |         58 |
| Tamilnadu        |       900 | 360       |           |        225 |        344 |        132 |        132 |
| Haryana          |       186 | 57        | 151       |         47 |         55 |          8 |          8 |
| Kerala           |       334 | 243       |           |         83 |        177 |         16 |         16 |
| Madhya Pradesh   |       331 | 408       |           |         83 |        123 |          8 |          8 |
| Punjab           |       308 | 119       |           |         77 |         91 |         21 |         21 |
| Rajasthan        |       364 | 204       |           |         91 |        140 |          6 |          6 |
| U. P. (East)     |       459 | 219       | 776       |        115 |        110 |          9 |          9 |
| U.P. (West)      |       384 | 182       | 739       |         96 |        111 |         12 |         12 |
| West Bengal      |       183 | 82        |           |         46 |         52 |          5 |          5 |
| Assam            |       158 |           |           |         40 |         46 |          2 |          2 |
| Bihar            |       248 | 136       | 444       |         62 |         86 |          6 |          6 |
| Himachal Pradesh |        64 | 24        |           |         16 |         20 |          1 |          1 |
| Jammu & Kashmir  |        52 |           |           |         13 |         11 |          1 |          1 |
| North East       |        44 |           |           |         11 |         12 |          1 |          1 |
| Orissa           |       152 | 57        |           |         38 |         38 |          4 |          4 |

Contd……4/-

## Details of liberalisation of administratively allotted spectrum in 800 MHz and 1800 MHz frequency bands

- (a) Existing  Cellular  Mobile  Telephone  Service  (CMTS),  License,  Unified  Access Service (UAS) License, and Unified License (UL) with access service authorisation licensees may liberalise their entire administratively allotted spectrum  holding  in  800  MHz  and  1800  MHz  band  in  a  Service  Area  for  the balance validity period of right to use spectrum.
- (b) Administratively allotted spectrum in 800 MHz and 1800 MHz bands refers to the spectrum allotted prior to auction of right to use spectrum in November, 2012.
- (c) After the in-principle approval of the competent authority that the liberalisation of administratively  allotted  spectrum  of  the  Telecom  Service  provider  (TSP)  is permitted subject to receipt of necessary payment in this regard, a demand note to  the  concerned  TSP  indicating  the  total  amount  payable  and  due  date  of payment and terms of payment will be issued by the Department.
- (d) The spectrum will be required to be liberalised for the balance validity period of right to use the same after payment of auction determined price prorated for the balance validity period.
- (e) The entry fee paid will be pro-rated for the balance validity period of right to use spectrum and will be deducted from the total amount to be paid by the TSP for liberalising the spectrum.
- (f)  In case more than one set of auction determined prices are available, the latest auction determined prices for the respective frequency band as available at the time  of  calculation  of  charges/amount  payable  for  liberalisation  of  spectrum, would be applied.
- (g) If  the  auction  determined  price  is  more  than  one  year  old  then  the  prevailing market rates would be determined by indexing the last auction price at the rate of SBI PLR.
- (h) In  case  the  spectrum  gets  liberalised,  the  One  time  Spectrum  Charge  (OTSC) will  be  charged  up  to  the  date  for  calculation  of  charges  for  liberalising  the spectrum and the same has to be paid by the licensee. However, if such demand is  pending  due  to  judicial  intervention  barring  any  coercive  action,  a  bank guarantee  equal  to  this  amount  shall  be  submitted  pending  final  outcome  of judicial process.
- (i)  After getting the spectrum liberalised, the TSPs may combine the same with the spectrum acquired by them in the same band through auctions/trading.
- (j)  Spectrum Usage Charges (SUC) will be required to be paid for the  liberalised spectrum as prescribed by the Government from time to time.
- (k) The  above  guidelines  shall  not  be  applicable  for  liberalisation  of  a  frequency band in a service area where auction determined price is not available for that band.

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