Despite the outcry from India's operators over the proposed base price for 2G spectrum in upcoming allocations, the nation's telecom ministry has recommended hiking the price by another 17%.
A Department of Telecom (DoT) panel has determined that the reserve price for pan-Indian 1800-MHz 2G spectrum should be 42.45 billion rupees ($772.2 million) per MHz, India's Economic Timesreported.
This is up from the 36.22 billion rupee per unit base price recommended by telecom regulator TRAI, a price slammed as exorbitant by operator groups including the GSMA.
India is planning to reallocate the spectrum to be voided along with the cancellation of 122 2G licenses through an auction process. But according to TRAI's recommendations, it is unlikely that more than one 5 MHz slot will be made available this year.
A DoT official insisted to the Economic Times that its pricing recommendation is not aimed at hiking the base price of spectrum, but at correctly applying TRAI's formula for determining the price - which is based on the reserve price during the 2010 3G auction.
The official claimed that when the State Bank of India's prime lending rates between 2010 and now are taken into account, the price should be higher than first recommended.
The final call on the auction terms will be made by an empowered group of ministers, led up by the nation's finance minister.