The government has held two rounds of auctions — in November last year and in March, following a Supreme Court order, cancelling all the new licences issued during the regime of former communications minister A Raja. The government, however, could not sell a major part of spectrum in the two auctions for want of demand.
India’s largest lender, SBI, has said that as per the Reserve Bank of India guidelines, loan for spectrum purchases are treated as unsecure loans. “In case the future spectrum is priced at high levels, as in the case of 3G spectrum (approximately R67,000 crore), then lenders may not be in a position to fund these business plans considering the unsecured nature of the lending,” SBI said in its comments to the TRAI on its consultation paper ‘Valuations and reserve price of spectrum’.
SBI pointed out that if reserve price is high “there may not be offtakes for spectrum”. Old GSM operators like Airtel, Vodafone and Idea also want low reserve price for spectrum auction.
“We have given the government a study based on international practices. As per the study by PricewaterhouseCoopers, price of spectrum per MHz should be to the tune of R1,200 crore per MHz of pan-India spectrum and reserve price should be only its 30%,” said Rajan S Mathews, director general, Cellular Operators Association of India.