EGoM grants some relief to cellcos

23 Jul 2012

The Empowered Group of Ministers (EGoM) overseeing the re-auction of 2G frequencies has reportedly improved conditions for telcos by reducing the base price for airwaves, cutting spectrum usage fees and approving a deferred payment scheme. According to DNA India, the EGoM has reduced the base price for 2G frequencies and cut the annual spectrum usage fee from 8%-10% to 3%-6%. The EGoM also allowed successful bidders for spectrum to pay around a quarter of the bid up front, with the remainder paid out over the following eight years. However, the EGoM’s decisions need to be ratified by the cabinet. Under the EGoM’s current proposals, operators are expected to shell out a minimum of INR140 billion-INR160 billion (USD2.53 billion-USD2.89 billion), which may still be too high for operators such as Sistema Shyam Teleservices (SSTL) and Uninor, which have threatened to quit the market if the terms for the licence auction are unfavourable.