May 11: Investing in spectrum is a much better option than stocks, gold or even real estate, going by telecom regulator Trai’s latest recommendations. In a few short years, the price of 2G spectrum will be incre-asing by over 750 per cent.
Trai on Tuesday has recommended that existing telecom operators who want renew their licenses will have to pay separately for 2G spectrum. The price paid will be equivalent to price discovered in the ongoing 3G. “Spectrum will not be bundled with license at the time of renewal and must be applied for separately,” said Trai.
The auction for 3G spectrum is still on and the price for pan-India spectrum had reached Rs 13,473 crore on Monday — which is the price that will now have to be paid for 3G spectrum. In 2008, new telecom operators paid just Rs 1,651 crore for 2G spectrum.
Licenses for 2G telephony are given out for 20 years, after which they are up for renewal. If accepted, the recommendations will hit old operators such as Airtel and Vodafone. Airtel’s license for Delhi ends in November 2014 and it will need to renew its license to continue its services. “You can’t expect us to given a commodity at a price which was prevalent 20 years back,” said a senior Trai official.