Sistema group bounces back in spectrum game

Sistema Shyam Tele-services Ltd on Monday bounced back by winning 2G spectrum for CDMA services in eight circles. The company has to pay R2,013 crore as price for airwaves over a period of 10 years beginning March 2016.

Sistema Shyam Tele-services Ltd (SSTL) on Monday bounced back by winning 2G spectrum for CDMA services in eight circles. The company has to pay R2,013 crore as price for airwaves over a period of 10 years beginning March 2016.

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Russian conglomerate Sistema's Indian unit, SSTL, has brought relief to about 15 million subscribers as the company did not participate in the first round of auction held in November saying that the reserve price of R9,000 for 2.5 MHz of CDMA spectrum was very high.

The company was issued licences in 21 circles in 2008. In February 2012, the Supreme Court ordered cancellation of all the licences that were issued during the regime of former communications and IT minister A Raja. Later, the company stopped providing services in 10 circles.

For second round of auction, it filed applications for only 11 circles. On Monday, it finally dropped Maharashtra, Mumbai and UP (East) circles.

R Chandrashekhar, secretary of the department of telecommunications (DoT) said that the auction ended in just three rounds.

"About 40% of the spectrum that was put for auction has been taken by the company," said Chandrashekhar. "In value terms, the value of the spectrum which has been won is around R3,639 crore, which represents little over 56% of the value of spectrum put for auction."

The government will not get any upfront payment as R1,626 crore will be adjusted against the license fee SSTL paid in 2008.

SSTL's decision of not bidding for all the 11 circles for which it had filed applications will put further pressure on the government's aim of earning through sale of spectrum. There were no takers for spectrum in 1,800 MHz and 900 MHz band for this round of spectrum. The government could manage only about R9,400 crore during first round of auction in November.