Cabinet okays Rs.14,000 crore spectrum reserve price (Lead)

August 3rd, 2012 - 10:01 pm ICT by IANS  

New Delhi, Aug 3 (IANS) The cabinet Friday approved Rs.14,000 crore as the reserve price for the 2G spectrum auction fixed by the Empowered Group of Ministers (EGoM) on telecom, a price lower than the one set by the sector regulator.

“The Cabinet approved the reserve price of Rs.14,000 crore for 5 MHz pan India in 1800 MHz band. The cabinet also approved the recommendation of EGoM for reserve price for 800 MHz band at 1.3 times that of 1800 MHz band,” Communications Minister Kapil Sibal told reporters after the cabinet meeting.

“Existing slab rate system for Spectrum Usage Charges (SUC), as recommended by EGoM, as the preferred option has also been approved by the Cabinet,” he added.

The minister said Friday’s decision signalled that India meant business and added that the EGoM would meet Monday to decide on the auction schedule.

Last month, the EGoM had recommended the reserve price to the cabinet which is lower than what the sector regulator has suggested for the 2G spectrum auction.

The Telecom Regulatory Authority of India (TRAI) had recommended a reserve price of Rs.18,000 crore.

Justifying the high price which has been highly opposed by the operators, Sibal said the terms of payment were “pathbreaking”.

“Now the spectrum has been allowed to be mortgaged with the banks who will themselves deal with it.”

The Supreme Court Feb 2 ordered cancellation of 122 licences including those of Uninor, Sistema Shyam Teleservices, Loop Telecom, Etisalat DB, Videocon, Idea Cellular and STel and asked for redistribution of these licences though an auction with a deadline of Aug 31.

All questions relating to the pricing of spectrum currently held by operators and related issues including pricing of contracted spectrum, excess spectrum, retrospective pricing will be considered later.

Meanwhile, Uninor urged the government to do everything to conduct the auctions within the Aug 31 deadline.

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