Trai proposes high 2G auction base price

Trai on Monday proposed a sharply-higher-than expected base price for an auction of 2G radio spectrum, after a court order to cancel all telecoms permits awarded in a scandal-tainted 2008 sale and redistribute them through open bidding. 

The regulator proposed a base price of 36.22 billion rupees ($695 million) for every megahertz of spectrum in the 1,800 mega hertz band, where radio airwaves will be made available after the cancellation of the licences. 

This is a steep increase from about $320 million each that carriers paid for at least 4.4 mega hertz of all-India spectrum in the earlier grant process, a price which a state auditor said was "unbelievably low". 

The Telecom Regulatory Authority of India (Trai) also proposed that the auction should be open to all eligible carriers holding spectrum below a prescribed cap. 

The regulator's recommendations are not binding on the government, which has the final say on the auction rules. ($1 = 52.0950 Indian rupees)