Spectrum price set, but cellcos still say cost is too high

6 Aug 2012

The Indian cabinet has set a minimum price for 2G spectrum at INR140 billion (USD2.52 billion), again sparking protests from operators. The Economic Times reports that the government approved proposals setting the base price for 1800MHz spectrum at INR28 billion per MHz, whilst 800MHz spectrum used by CDMA operators is expected to be even costlier, INR36.4 billion per MHz. Further, providers will be obliged to share 2%-8% of their annual revenues as spectrum usage charges. Operators have called the prices untenable, with the managing director of Idea Cellular Himanshu Kapania saying that the reserve price ‘does not present a viable business case.’

With the majority of issues surrounding the spectrum sale now finalised, the Empowered Group of Ministers (EGoM) will meet today to hammer out a revised schedule for the auction, though the process is likely to stretch beyond the 31 August deadline imposed by the Supreme Court.

India