Ministers clear spectrum auction prices; bids to be held in Jan
The government’s plan to auction telecom spectrum entered the final lap on Friday after a high-powered ministerial panel approved hiking by up to 25% the reserve price than that suggested by the Trai. HT reports.india Updated: Nov 23, 2013 01:08 IST
The government’s plan to auction telecom spectrum entered the final lap on Friday after a high-powered ministerial panel approved hiking by up to 25% the reserve price than that suggested by the Telecom Regulatory Authority of India (Trai).
This is in line with what the Telecom Commission — the highest policy-making body for the sector — has proposed as authorities make a fresh attempt to sell radio waves after two abortive rounds when carriers stayed away citing high prices.
The a fresh round of auction, based on prices recommended by defence minister AK Antony-headed empowered Group of Ministers (EGoM) will likely take place during January 21-22.
A successful selling of spectrum is critical for the government’s fiscal math in an election year amid a widespread economic deceleration.
Two previous rounds of bidding in November last year and March this year, carried out after the Supreme Court had struck down spectrum allocated in 2008 on a “first-come-first-served” basis, fetched the government less than a quarter of Rs. 45,000 crore it had expected.
It was hit by a cold response from companies who said that prohibitively high prices could force a sharp rise in telecom tariffs, eventually hurting consumers.
The EGoM also asked the Trai to suggest a base price for the 800 MHz spectrum, which is used by CDMA operators such as Sistema. The regulator had not recommended a reserve price for the 800 MHz band, saying there was no need to auction these airwaves now.
Earlier this month, the Telecom Commission had suggested fixing a minimum Rs. 1,765 crore per MHz as the price for pan-India spectrum in the 1,800 MHz band, 15% higher than the TRAI’s suggested rate of Rs. 1,496 crore.
The base price for 900 MHz should be 25% higher than what the Trai had recommended. Spectrum in this band will cost a minimum of Rs. 360 crore per MHz for Delhi, Rs. 328 crore for Mumbai and Rs. 125 crore for Kolkata.
“The EGoM has accepted the reserve price recommendations of the Telecom Commission,” telecom minister Kapil Sibal said.