Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Industry / Telecom/  EGoM accepts Telecom Commission suggestions on spectrum pricing
BackBack

EGoM accepts Telecom Commission suggestions on spectrum pricing

Ministerial panel allows spectrum trading, says issue of spectrum usage charge will be decided by an inter-ministerial group

Communications minister Kapil Sibal said no discussions on the new merger and acquisition guidelines took place. Photo: MintPremium
Communications minister Kapil Sibal said no discussions on the new merger and acquisition guidelines took place. Photo: Mint

New Delhi: In what may delay the auction of air waves expected to take place in January, an empowered group of ministers on radio spectrum on Friday asked the telecom regulator to give its recommendations on a minimum price for the 800Mhz band.

Largely accepting the recommendations of the Telecom Commission on the reserve price for spectrum in the 1800Mhz and 900Mhz bands that will go on the block, the panel also allowed spectrum trading and decided the issue of spectrum usage charge would be decided by an inter-ministerial panel after the department of telecommunications (DoT) announces specific guidelines, communications minister Kapil Sibal said after the Friday meeting.

The Telecom Regulatory Authority of India (Trai) had recommended a uniform spectrum usage charge, a suggestion that seems to have divided the industry down the middle, with older operators in favour of the move.

On 800Mhz, Trai had said that the government should look into extended GSM that would allow the GSM-based operators access to the spectrum, rather than recommending a reserve price for the spectrum that is mainly used by the CDMA operators.

Trai will also be asked to give its recommendations on the modalities of spectrum trading

Sibal said no discussions on the new merger and acquisition guidelines took place.

Trai had recommended a 60% cut in the prevailing reserve price for the spectrum in the 900 MHz band in Delhi, Mumbai and Kolkata service areas and a 37% cut for spectrum in the 1800 MHz band after two auctions held in November and March failed.

The miniterial group, however, accepted the Telecom Commission’s recommendation that base price for all-India 1800 MHz spectrum be fixed 15% higher than Trai’s suggested rates. For 900MHz, the panel agreed on the commision’s suggestion to increase the reserve price to be 25% higher than Trai ‘s recommendation.

The decision to increase the reserve price was not welcomed by the industry.

“By ignoring the Trai recommendations and increasing the base price, this series of auction may have reduced interest in the auction. However, these auctions are unlikely to have same fate as the last auctions. There is likely to be reasonable demand for the spectrum, considering the requirement of spectrum for provision of good quality services. Trading of scarce spectrum would be positive for the sector," said Hemant Joshi, partner at consultancy Deloitte Haskins and Sells. “Clarity on other policy matters like M&A, license renewal, re-farming, etc., before the auctions would go long way in making these auctions successful."

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Industry News, Banking News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 22 Nov 2013, 07:20 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App