Amid confusion, criticism and the indecisiveness which is surrounding the TRAI recommendations on the reserve price for spectrum auction, the telecom commission is working on plans to sell 2G spectrum for a period of 10 years, reports Economic Times.
Currently, airwaves sold through auctions, or even those that were issued to companies bundled with their mobile permits are valid for 20 years. A reduced tenure will bring down the reserve price of the airwaves in the sale process.
"We have asked Trai to work out the reserve price if the spectrum is given for a 10 year period. Halving the period of possession of airwaves does not imply that the reserve price will be 50% of what Trai had recommended earlier. This is one of the options that will be presented to the EGoM," The newspaper quoted Telecom secretary R Chandrasekhar as saying.
“The allotment will be for 20 years, but the amount they pay will be for 10 years. After this time, they (the telcos) will have to pay the new prevailing market price at the time,” a senior DoT official told Live Mint.
“There is always an auction taking place and there is always a current market price for the spectrum. We have asked Trai to give us their analysis of the advantages and disadvantages of such a move for the operators and the government.”
"The upside is that telcos have to pay less, but at the same time, a 10 year tenure adds to the uncertainties. If technological advancements allow airwaves to be used for different types of services, the value of spectrum will go up, "he added.