India’s Department of Telecommunications (DoT) has rejected the Telecom Regulatory Authority of India’s (TRAI) recommended pricing for 3G spectrum in next month’s auction and asked the regulator to review the proposal.

TRAI last week suggested a reserve price of INR27.2 billion ($425 million) per megahertz for the 2.1 GHz spectrum, which is almost 20 per cent below what operators paid in 2010 but four times higher than the reserve price at that time. The price in 2010 was INR33.49 billion per megahertz.

The DoT’s Telecom Commission has reportedly recommended a base price of INR38.90 billion per megahertz, which is 43 per cent higher, the Economic Times said today.

TRAI will likely make its final recommendation to the commission within two weeks.

The auction, which is scheduled for 23 February, will now include 2G and 3G spectrum in the 800 MHz, 900 MHz, 1.8 GHz and 2.1 GHz bands.

The cabinet has now cleared the sale of 99.2 MHz of 1.8 GHz spectrum in 15 regions, 177.8 MHz in the 900 MHz band in 17 service areas, 103.75 MHz of 800 MHz (2G used by CDMA operators) in all 22 regions, and 85 MHz in the 2.1 GHz band. It has already approved the reserve price for the three 2G bands and was expected to approve the pricing for the 3G spectrum at its next meeting on 15 January.

The reserve price is set at INR36.46 billion per megahertz for the 800 MHz band, INR39.8 billion in the 900 MHz band (excluding Delhi, Mumbai, Kolkata and Jammu & Kashmir where frequencies are unavailable) and INR21.91 billion in the 1.8 GHz band (excluding Maharashtra and West Bengal).

The combined auction is expected to generate as much as INR800 billion for the government.