2G auction to wait on price for 800MHz spectrum

18 Nov 2013

The Economic Times writes that India’s upcoming 2G spectrum auction has been pushed to 21 January to allow for the Telecom Regulatory Authority of India (TRAI) to propose reserve prices for 800MHz frequencies. The empowered group of ministers (EGoM) will meet to rule on the recommendations of the telecoms ministry regarding spectrum pricing on 22 November, following which, the cabinet will either ratify or reject the decision on 7 December. According to the regulator’s schedule for the spectrum sale, notices inviting applications will be issued on 16 December, whilst the final list of bidders will be drawn up on 18 January.

As previously noted by CommsUpdate, India’s various telecoms authorities have each reached different conclusions on spectrum pricing. The TRAI suggested the largest cut in reserve prices, on the basis that lower entry prices would encourage greater participation, and would guarantee the sale of the airwaves. Weak macroeconomic conditions and the highly leveraged debt positions of the nation’s operators were also cited as a deciding factor. Sister watchdog the Department of Telecommunications (DoT) argued that the TRAI had reduced prices too greatly, and sought to protect government revenues with a recommended price per-MHz of pan-India spectrum of INR22.03 billion (USD356.08 million), compared to the INR14.96 billion put forward by the TRAI. Finally, the Telecom Commission, the highest decision-making body within the ministry, suggested a price of INR17.63 billion, somewhere between the recommendations of the TRAI and DoT. The commission also instructed the TRAI to prepare a recommended price for 800MHz spectrum, rejecting the TRAI’s claim that there was no demand for the frequency band – currently used for CDMA services – after Russian-backed cellco Sistema Shyam TeleServices (SSTL) protested against the omission of 800MHz airwaves.