The Telecom Commission on Wednesday recommended raising reserve price for auction of pan-India mobile phone spectrum which is 15 per cent more than the one suggested by Trai, and 25 per cent higher in case of key circles like Delhi and Mumbai.

The Commission also approved the merger and acquisition guidelines that would allow a market share of up to 50 per cent of the resultant entity, up from 35 per cent earlier.

The companies will also be allowed to retain two blocks of 3G spectrum in respective areas as a result of the merger.

For 800 Mhz, the commission decided to conduct the auction. It will now ask Trai to give the reserve price for 800 Mhz spectrum.

Reacting to the TC’s decision, GSM industry body COAI said it was “disappointed” with the new price.

“We would have liked that if the commission could have retained the price recommended by Trai. But even with the 15 per cent increase in price, we expect good participation of operators in the auction,” said COAI Director General Rajan S Mathews.

Sistema Shyam Teleservices also welcomed commission’s decision to auction 800 Mhz band.

“Sistema Shyam Teleservices Ltd welcomes the decision of the Telecom Commission to auction the 800 Mhz spectrum band,” SSTL spokesperson said.

TC at its meeting here recommended to an Empowered Group of Ministers (EGoM) that reserve price for pan-India 1800 MHz spectrum be fixed 15 per cent higher than Trai suggested rates. The same for 900 MHz be fixed 25 per cent higher than what the Trai had recommended.

The rates recommended by TC will still be lower than the previous auction price.

Sources said the Telecom Commission has also approved the M&A policy, allowing mergers with a combined market share of up to 50 per cent. This would replace the cap of 35 per cent market share of the combined entity currently in vogue.

The new base price per mega hertz (MHz) in 1800 band for Delhi has been suggested at Rs 218.90 crore, Mumbai Rs 206.74 crore and Kolkata Rs 73.13 crore, which is 25 per cent higher than the base price recommended by Trai.

The regulator had recommended Rs 175.12 crore for Delhi, Rs 165.39 crore for Mumbai and Rs 58.50 crore for Kolkata as the reserve price.

Similarly for 900 Mhz spectrum, the base price per MHz will be Rs 359.65 crore for Delhi, Rs 327.50 crore for Mumbai and Rs 125.27 crore for Kolkata.

Trai had recommended Rs 287.72 crore for Delhi, Rs 262 crore for Mumbai and Rs 100.22 crore for Kolkata as the per Mhz price in 900 band.

The Telecom Commission, the highest decision making body of Department of Telecom (DoT) decided that the value of spectrum be set as the reserve price for the three metro and five category A circles.

It, however, approved the base price set by Trai for the remaining 14 circles. As a result, the base price will increase by about 25 per cent in the eight circles and the pan-India price will be up by 15 per cent.