The Department of Telecommunication plans to seek clarity from regulator Trai on the pricing of radio waves for a 30-year period, with the operators questioning Trai’s approach in fixing the reserve price.

Sources said the DoT plans to seek a detailed methodology adopted by the regulator in arriving at the reserve price. In its recommendations, the Telecom Regulatory Authority of India (Trai) said there were no global norms to fix the reserve price for 30 years.

The regulator instead set the reserve price on the basis 20-year tenure for spectrum — and then applied 1.5 times multiple to arrive at the base price for 30 years. Several operators said the decision to hold spectrum for 30 years was meant to infuse liquidity and encourage investment. It was not just a case of valuation.

Another stakeholder said since the spectrum for 30 years will be sold in an auction, market forces will determine pricing based solely on demand and supply constraints. Another stakeholder said the operators should be offered both the options – either to opt for a 20-year or a 30-year duration. The valuation should be extrapolated with appropriate indexing.

Operator body COAI said, “if one were to look at the pan-India price of 3.5GHz spectrum, we are back to square one with effectively no change and will nullify the relief provided by the government”.

The regulator has recommended a mega auction plan of Rs 7.5 lakh crore for over 1 lakh megahertz spectrum in case the government allocates them for a period of 30 years.

With large swathes of spectrum remaining unsold in the last two auctions, Trai recommended to the government for selling the airwaves in all existing bands of 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz and new slots of 600 MHz, 3300-3670 MHz and 24.25-28.5 GHz. It has suggested about 39 per cent lower reserve price for all bands compared with the prices proposed in the previous recommendations in 2018.