DoT retains reserve price for 3G spectrum

DoT retains reserve price for 3G spectrum
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First Published: Sun, Sep 14 2008. 04 39 PM IST
Updated: Sun, Sep 14 2008. 04 39 PM IST
New Delhi: The Department of Telecom has ignored Finance Ministry’s suggestion to raise the reserve price of spectrum for 3G mobile services to Rs2,500 crore, saying the auction process would discover the best price.
“DoT has carefully considered the suggestion ofthe Ministry of Finance to raise the reserve price from Rs2,200 crore to Rs2,500 crore but maintained the status quo since the ascending order auction would in any case discover the price in consonance with market conditions,” DoT sources said.
The Ministry of Finance held a meeting with the senior officials of the Telecom Commission recently and raising the reserve price was one of the major issues discussed.
According to sources, DoT has already incorporated rest of the amendments suggested by the Ministry of Finance.
The DoT has, however, suitably incorporated the change in the annual spectrum usage charge for 3G services and it would be at the rate of 1% on the incremental revenue due to 3G mobile services.
On this also, the DoT is planning to have a detailed discussions with all the stakeholders like telecom operators for evolving a formula for fixation of annual spectrum charge.
Sources close to the development said that DoT may consider segregation of revenues generated from 2G and 3G services separately to work out the annual spectrum usage charges.
They added that this would be necessary to maintain transparency in disclosing the revenues from their different services for the purpose of working out annual spectrum usage charge and licence fee paid by telecom service providers to the government.
Even as the DoT has initiated the process to appoint an e-agency to conduct the auction of spectrum for 3G services, the government would also simultaneously work on these issues and may incorporate changes in the guidelines shortly.
The government is looking at generating close to Rs40,000 crore from the auctioning of spectrum for 3G services.
Earlier, the ministry of finance had complained that it has not been consulted on DoT guidelines on auction and allotment of spectrum for 3G and WiMax telecom services.
However, responding to it,the Telecom Secretary Siddartha Behura had also shot off a strongly worded letter last month to the Finance Secretary for questioning the procedure for 3G guidelines, saying the policy announcement was made after due consultations and there was no departure from the Cabinet decision.
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First Published: Sun, Sep 14 2008. 04 39 PM IST