TRAI's methodology of calculating 700MHz base price is suspect as there is significant price variation (almost 2x) between 700MHz and the neighbouring 850MHz band. We think the entire 700MHz is likely to be unsold at these prices (Rs115bn/MHz) in the upcoming auction. Given high expectations, a failure of 700 auction could boomerang on TRAI. Hence, if a failed auction happens first, TRAI?s credibility could take a hit.
The sale proceeds of all spectrum in the coming auctions (including 700MHz) at reserve price alone would be more than what the industry has ever spent on spectrum.
