The spectrum pricing recommended by the regulator TRAI on Monday for the future auctions has evoked mixed reactions.  While the move is considered to be beneficial for operators like Vodafone, Airtel and Idea whose licences would expire in 2014, others like Videocon and MTS are peeved at the suggestions.

While Sanjay Kapoor, former chief executive of Bharti Airtel's India and South Asia operations said that the recommendations are in line with the requirements of the multiple stakeholders in the industry and a flat rate SUC (spectrum usage charge), spectrum trading are all steps in the right direction, Videocon Arvind Bali, Director & CEO, Videocon Telecommunications Ltd feels that the recommendations recognizes and reconfirms the fact that the reserve price fixed for the Nov 2012 auction was wrong and those who bid for spectrum in the said auction have paid prices which are exorbitantly high and would not support their business case.

“Clearly, the recommendations are favorable to the existing players who acquired license prior to 2008, and is penalizing the new players like us” Bali said.

He said that while all over the world, new players are incentivized over existing players to discounted price for spectrum etc, it is unfortunate that the new players in India had to suffer cancellation of license jeopardizing While their business and were compelled to bid for spectrum at exorbitantly high prices.

"Recommendations are a mix bag as far as AUSPI is concerned. We are happy that there will be no reservation for renewal of licences in 1800 MHz and 900 MHz band, this means full refarming will happen," AUSPI Secretary General Ashok Sud said.

Telenor and MTS had no option but to buy spectrum in seven circles each as there was threat of discontinuation of their services following a Supreme Court order dated February, 2012 that cancelled their licences.

Then in March, 2013 MTS had to buy spectrum at high price in eight circles, again under threat of cancellation of its licences.

Now, within six months, the TRAI has proposed reducing reserve price by almost 50% to Rs 1,496 crore per MHz in 1800 band.

TRAI on Monday recommended on Monday a pan-India reserve price of Rs. 1,496 crore per MHz in the 1800 band for the upcoming auction.

TRAI recommended a reserve price of Rs. 288 crore per MHz for Delhi, Rs. 262 crore for Mumbai and Rs. 100 crore for Kolkata in In the 900 MHz band.

Trai has said that for auction of spectrum in 1800 MHz band, the block size should be of 2 x 200 KHz each and the existing licensee will have to bid for a minimum of 3 blocks. A new entrant will be required to bid for a minimum of 25 blocks of 2 x 200 KHz each.

The government got a tepid response in auctions held in November last year and March this year which prompted it to ask Trai to work out fresh reserve price to get greater response. Most of the operators had blamed the higher reserve price for the auction fiasco.