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Spectrum sale in March; EGom for price cut for CDMA

 

AGENCIES | New Delhi, January 7, 2013 16:12
Tags : Telecom Spectrum auction | Kapil sibal | CDMA-band radiowaves | EGoM | Finance minister |
 

Telecom Spectrum auction from Mar 11The second round of telecom spectrum auction is likely to be held on March 11 after the Cabinet decides on the reserve price, which may be reduced by up to 50 percent, for CDMA-band radiowaves.

An Empowered Group of Ministers (EGoM) headed by Finance Minister P Chidambaram on Monday finalised the schedule for auction of unsold GSM spectrum of the first round and 900 MHz spectrum together with 800 MHz band airwaves used for offering CDMA-based mobile services.

"All the auction for which announcement has been made today will be held in March 2013," Telecom Minister Kapil Sibal told reporters after the EGoM meeting.

Sources said meanwhile that the government has plans to start the auction from March 11. The auction will start with the unsold spectrum in 1800 Mhz band at a reserve price, 30 percent lower, compared the one in the previous round held in November.

"The auction for 1800 MHz band in four circles in which bids were not received in November 2012 will be put up for auction. The reserve price will be 30 percent lower than the reserve price that was fixed in November 2012 auction," Sibal said.

The EGoM, however, left it to the Cabinet to decide on cutting base price of CDMA spectrum by 30-50 percent, sources said. The previous reserve price -- 11 times high than the amount operators paid in 2008 -- did not receive any bids.

Sibal said the EGoM has decided to "conduct auction in the 800 MHz band in all circles since no bidder participated in that band in the November auction... We will take the recommendations to the Cabinet and it will decide on the reserve price."

The government had earlier fixed CDMA spectrum price at 1.3 times than the GSM spectrum in 1800 Mhz band. At that rate, each block of 800 Mhz band would have cost Rs 4,550 crore, and Rs 18,200 Mhz for 5 Mhz, pan-India.

Sources said the EGoM will recommend 30-50 percent rate cut for CDMA spectrum reserve price -- based on the decision for price cut of GSM spectrum in the 1800 Mhz band.

"Since CDMA technology has few takers, EGoM felt that it may attract no bidders; hence it will recommend option of 50 percent price cut as well," said a source.

Meanwhile, Sibal said the EGoM has decided "to conduct auction in 900 MHz band in three metros - Delhi, Mumbai and Kolkata - where licences are due for renewal in 2014."

He added that for 900 MHz, the quantum of spectrum that will be put up for auction is 15 MHz each in Delhi and Mumbai and 12.5 MHz in Kolkata.

The Cabinet, on December 13, approved reserve price for 900 Mhz band in Delhi and Mumbai to be twice of revised reserve price for the 1800 MHz band and for Kolkata it would be twice the price obtained in November auction of 1800 Mhz.

"In 1800 MHz band, quantum of spectrum put up for auction will be 15 MHz in Delhi and Mumbai, while for Karnataka and Rajasthan, it will be 10 MHz with topping up provision of 3.75 Mhz as in November 2012 auction," Sibal said.

Government had failed to sell CDMA spectrum at 1.3 times higher reserve price than that of GSM spectrum in 1800 Mhz band in auctions that concluded in November. The pan-India reserve price for 5 Mhz of spectrum in 1800 Mhz band was fixed at Rs 14,000 crore.

The last round of spectrum fetched the exchequer just Rs 9,407 crore, as against the government expectations of around Rs 28,000 crore, on account of high reserve prices.

The Supreme Court in February last year had cancelled 122 licences in the 2G spectrum allocation case. It included CDMA licences of Sistema Shyam Teleservices in 21 telecom circles and Tata Teleservices' in three circles.

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Issue Dated: Feb 5, 2017