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TRAI advocates new operators entering 2G auctions

The Indian regulator TRAI (Telecom Regulatory Authority of India) has advised that the country’s spectrum auctions be open to new operators as well as the existing providers which had their licences cancelled following a Supreme Court ruling in February.

The regulator has stated that the auctions should treat startup operators equally to established ones which hold CMTS, UAS and unified licences. New operators which obtain licences are recommended to take a state or national licence.

Nationwide 1800MHz licences have a set opening bid of INR36.22 crore (US$689.6 million) – a marked increase on the prices charged in the 2008 2G auctions which, according to the Supreme Court, cost India a vast sum in lost revenue.

The combination of easy entry for start-ups and higher prices will aid competition and could shake up the market by challenging the established operators. However, the suggestions have been dismissed as "arbitrary, regressive and inconsistent” by the Cellular Operators Association of India and the Association of Unified Telecom Service Providers of India.

The trade associations have also reportedly claimed that: “[TRAI’s proposals] will also affect the investors' already shaken sentiments as [they] will prove to be an impediment for operators to invest and expand services."

Under TRAI’s recommendation, licences would be auctioned via a simultaneous multiple round format, whereby participants can bid for more than one of the available licences at the same time. In addition, all licences would be made available concurrently.

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