EGoM to decide spectrum price for auction early next month

EGoM to decide spectrum price for auction early next month

An Empowered Group of Ministers (EGoM) headed by Finance Minister Pranab Mukherjee is likely to take final decision on base price for auction of telecom spectrum early next month.

The Telecom Commission, the highest decision making body in the Department on Telecom, which discussed the issue of pricing on Saturday, decided to leave the final decision to the ministers panel.

The Commission studied the Telecom Regulatory Authority of India (Trai) recommendation on reserve price on spectrum and decided to present its analysis to the EGoM for final decision, DoT secretary R Chandrashekhar, who is also Telecom Commission chairman told reporters here.

He added that detailed analysis would be carried out based on the Trai suggestion keeping in mind that a balance needs to be struck between spectrum price and three other critical factors — revenue to government, tariff to consumer and viability of investment and continued attractiveness of the sector.

Earlier, Trai had proposed Rs 3,622.18 crore for one megahertz (MHz) as base or minimum price for pan-India spectrum for auction. This price is around 10 times higher than the floor price at which the former telecom minister A Raja had allocated spectrum and licences in 2008. However, telecom companies have opposed the high price for radio waves saying that this would lead to huge increase in tariff. 

The Supreme Court had cancelled the licences in the 2G spectrum case, following which the Trai was asked to recommend auction modalities for the cancelled permits in the 800 MHz (CDMA services) and 900 MHz (GSM services) bands.

He said the Commission would also ask for Trai’s inputs on whether a period of 10 years for pricing of spectrum would be more appropriate keeping in view the rapid changing technology. However the Commission has not taken any decision on spectrum other than the 800 MHz and 1800 MHz bands.

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