The Empowered group of ministers (EGoM) has approved the Telecom Commission's proposal
that recommended 15 per cent and 25 per cent hike in auction base
price of 1,800 MHz and 900 MHz bands respectively, above the Telecom Regulatory Authority of India's (Trai) suggested price.
The Commission had earlier this month suggested fixing a minimum Rs 1,765 crore per megahertz (MHz) as the price for pan-India spectrum in the 1,800 MHz band, 15-per cent higher than Trai's suggested price of Rs 1,496 crore.
Even after the increase, the reserve price is lower than the one fixed for failed auction of November 2012, when spectrum in the 1,800 MHz band was offered at a base price of Rs 2,800 crore per MHz.
"The base price for 900 MHz should be 25 per cent higher than what the Trai had recommended," the EGoM, headed by defence minister AK Antony, said.
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.
Even after the increase, the reserve price is lower than the one fixed for failed auction of November 2012, when spectrum in the 1,800 MHz band was offered at a base price of Rs 2,800 crore per MHz.
"The EGoM met today (Friday) and we took a final decision on the reserve price and the EGoM has accepted the reserve price recommendations of the Telecom Commission," Telecom Minister Kapil Sibal told reporters in the national capital.
An operator can bid for a maximum of 5 MHz in the 900 MHz band.
For the 1,800 MHz band, Sibal said that a decision will be taken on the quantum to be auctioned after consulting DoT about spectrum availability. "We have to finalise the total quantum of spectrum in the 1,800 MHz band that has to be put up for auction. That would be decided hopefully at the end of the coming week," Sibal said.
The telecom minister said that there will be no reservation for existing operators in the 900 MHz band.
"As far as 900 MHz auction is concerned, there is going to be no reservation. All those who have 900 MHz will be participating in the auction," he added.
The auction would be held around January 21-22 next year.
PwC India leader, telecom, Mohammad Chowdhury said, "The reserve price determined for 1,800 MHz and 900 MHz spectrum remains high in our opinion due to the sector's profitability remaining well below expected margins for mobile operations in emerging markets."
EGoM SEEKS TRAI OPINION ON CDMA
The EGoM has asked Trai to suggest a base price for the 800 MHz CDMA airwaves, used by Sistema Shyam Teleservices (SSTL), RCom and Tata Teleservices. Trai had not recommended a reserve price for the 800 MHz band saying there is no need to auction these airwaves now due to lack of demand. This had led to major tussle between DoT and Trai.
No deadline has been fixed for setting the new base a price. With the election code of conduct expected to kick in February, CDMA auction is likely to happen when the next government comes to power.
DoT had last week asked Trai to suggest an auction price for the 800 band within 15 days.
LALIT SHARMA
PGDM 2nd YEAR
The Commission had earlier this month suggested fixing a minimum Rs 1,765 crore per megahertz (MHz) as the price for pan-India spectrum in the 1,800 MHz band, 15-per cent higher than Trai's suggested price of Rs 1,496 crore.
Even after the increase, the reserve price is lower than the one fixed for failed auction of November 2012, when spectrum in the 1,800 MHz band was offered at a base price of Rs 2,800 crore per MHz.
"The base price for 900 MHz should be 25 per cent higher than what the Trai had recommended," the EGoM, headed by defence minister AK Antony, said.
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.
Even after the increase, the reserve price is lower than the one fixed for failed auction of November 2012, when spectrum in the 1,800 MHz band was offered at a base price of Rs 2,800 crore per MHz.
"The EGoM met today (Friday) and we took a final decision on the reserve price and the EGoM has accepted the reserve price recommendations of the Telecom Commission," Telecom Minister Kapil Sibal told reporters in the national capital.
An operator can bid for a maximum of 5 MHz in the 900 MHz band.
For the 1,800 MHz band, Sibal said that a decision will be taken on the quantum to be auctioned after consulting DoT about spectrum availability. "We have to finalise the total quantum of spectrum in the 1,800 MHz band that has to be put up for auction. That would be decided hopefully at the end of the coming week," Sibal said.
The telecom minister said that there will be no reservation for existing operators in the 900 MHz band.
"As far as 900 MHz auction is concerned, there is going to be no reservation. All those who have 900 MHz will be participating in the auction," he added.
The auction would be held around January 21-22 next year.
PwC India leader, telecom, Mohammad Chowdhury said, "The reserve price determined for 1,800 MHz and 900 MHz spectrum remains high in our opinion due to the sector's profitability remaining well below expected margins for mobile operations in emerging markets."
EGoM SEEKS TRAI OPINION ON CDMA
The EGoM has asked Trai to suggest a base price for the 800 MHz CDMA airwaves, used by Sistema Shyam Teleservices (SSTL), RCom and Tata Teleservices. Trai had not recommended a reserve price for the 800 MHz band saying there is no need to auction these airwaves now due to lack of demand. This had led to major tussle between DoT and Trai.
No deadline has been fixed for setting the new base a price. With the election code of conduct expected to kick in February, CDMA auction is likely to happen when the next government comes to power.
DoT had last week asked Trai to suggest an auction price for the 800 band within 15 days.
LALIT SHARMA
PGDM 2nd YEAR
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