DoT to request TRAI recommendations for CDMA base price early this week

"We will write to TRAI soon after minutes of the meeting (EGoM) are approved. Hopefully, early in the coming week," Telecom Secretary M F Farooqui told PTI.

The Empowered Group of Ministers, headed by Finance Minister P Chidambaram, in its meeting on Friday decided to ask Telecom Regulatory Authority of India (TRAI) for its recommendation for CDMA spectrum base price.

The regulator in its recommendations on valuation of spectrum in September had suggested no auction for CDMA spectrum (800 Mhz band frequencies) and asked government to explore possibility of using part of it for GSM service.

The Department of Telecom (DoT) by mid-November had asked TRAI to suggest a reserve price for 800 MHz band, used for offering CDMA services, within 15 days.

(Also see: DoT to submit report on TRAI spectrum auction recommendations on Tuesday)

TRAI replied saying it cannot suggest a price for auction of spectrum in 800 Mhz band as the process needs to be started afresh.

(Also see: TRAI reiterates spectrum auction proposal to cut base price by 60 percent)

CDMA spectrum is used by Sistema Shyam Teleservices (SSTL), Reliance Communications and Tata Teleservices. Public sector companies BSNL and MTNL too have CDMA spectrum but they have offered to surrender a part of the airwaves.

Telecom operators like Airtel, Vodafone, Idea Cellular are pure-play GSM based service providers.

SSTL, which is pure play CDMA technology based service provider and provides services under brand name MTS, had alleged TRAI of favouring GSM players.

When contacted SSTL after EGoM's decision, the company said: "We look forward to TRAI to fix the reserve price for the 800 MHz spectrum band, at reasonable level and in the same ratio as decided by EGoM in the previous auction in March 2013 so that concurrent auction of 800 MHz along with 900 and 1800 MHz could be conducted early next year."

The EGoM has approved the final price for auction of GSM spectrum at 25 percent higher than what was suggested by Telecom Commission for 900 Mhz band and 15 percent higher for 1800 Mhz band over base price recommended by TRAI.

Mobile phone signals transmitted using 900 Mhz band frequencies reach about double distance compared to that transmitted in 1800 Mhz band. The CDMA spectrum band is also considered to be equivalent to 900 Mhz band by many technical experts.

The CDMA eco-system like availability of mobile phones is not as developed as that of GSM which dominates over 85 percent of global telecom market.