Minimum bid price for 2G spectrum too high: SSTL

August 7th, 2012 - 9:44 pm ICT by IANS  

New Delhi, Aug 7 (IANS) Sistema Shyam Teleservices (SSTL) Tuesday said the minimum bid price fixed for 2G spectrum auction is excessively high and that the CDMA spectrum base price, set 1.3 times more than the GSM price, is not justified.

“Given the realistic sectoral environment and market dynamics, I believe the reserve price for spectrum as approved by the cabinet is excessively high,” said Vsevolod Rozanov, president and chief executive officer, SSTL.

“There is no rationale to support why the 800 Mhz CDMA spectrum should be priced 1.3 times more than the GSM 1800 Mhz spectrum. It is significant to note that the GSM spectrum being put up for auction is liberalized whereas the 800 Mhz CDMA spectrum continues to be non-liberalized,” he added.

The cabinet Friday approved a reserve price of Rs.18,200 crore for 5 Mhz spectrum in 800 Mhz being used for CDMA services, 1.3 times higher than Rs.14,000 crore as the reserve price for 5 MHz in the 1800 MHz band used for GSM services.

SSTL, a joint venture between Russia’s Sistema and India-based Shyam Group, stuck to its earlier demand that the reserve price be Rs.1,658 crore.

The Russian conglomerate, which holds 56.68 percent stake in SSTL, has invested $3.1 billion in the India venture.

It said being a pure play CDMA operator, its legal case is significantly different compared to other mobile operators.

To protect its interest it has filed a curative petition before the Supreme Court.

“I am hopeful that the highest court of the land will look into the merits of SSTL’s case and will give us justice,” he added.

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