EGoM brings down base spectrum price

In a relief to telecom operators in the country, the Empowered Group of Ministers (EGoM) is believed to have suggested setting a 20 per cent lower base or bid start price at Rs 14,111 to Rs 15,111 crore for the proposed spectrum auction.

'The EGoM has suggested a base price between Rs 14,111-Rs 15,111 crore for 5 Mhz of airwaves in auction,' sources said. This is about 20 per cent lower than around Rs 18,000 crore reserve price for pan-India spectrum (in 1800 Mhz band) suggested by the telecom regulator TRAI for the auction of spectrum vacated from the Supreme Court cancelling 122 licences issued by the then telecom minister A Raja in 2008.

However, industry had been pitching for a 80 per cent cut in the reserve price, as they feel that the  TRAI-recommended rates would lead up to 100 per cent hike in mobile telephone charges. 'It is saddening to know that EGoM has not given due consideration to the fundamental issue of unsustainable high reserve prices which will significantly increase costs, thereby invariably increasing the tariffs,' the director general of the industry body Cellular Operators Association of India (COAI) Rajan S Mathews said.

EGoM has suggested to fix 1.3 times of this price as minimum price for companies that may bid for airwaves that are being used for providing CDMA services at present.

The Russian conglomerate Sistema, which holds majority stake in the Indian firm Sistema Shyam Teleservices, said that it will exit if the minimum price is not brought to around Rs 1,650 crore, which its partner paid to get telecom licence in 2008.

On the other hand, the GSM industry body COAI has called it 'discrimination'. 'A similar option is not being extended to GSM operators to retain their 900 MHz spectrum at a price of 1.3 times of 1800 MHz,' Mathews said.
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