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Updated: November 22, 2013 22:37 IST

EGoM approves higher base price for upcoming spectrum auction

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Kapil Sibal
Kapil Sibal

A high-power ministerial panel, on Friday, approved hiking by up to 25 per cent the reserve or start price for the auction of mobile phone spectrum in January.

An Empowered Group of Ministers (EGoM), headed by Defence Minister A. K. Antony, agreed with the recommendation of the Telecom Commission to better regulator Telecom Regulatory Authority of India’s (TRAI) suggested reserve or base price for the auction of spectrum in the 1800 MHz and 900 MHz bands, used by GSM operators such as Bharti Airtel and Vodafone.

The panel did not take up the merger and acquisition norms.

The EGoM also asked TRAI to suggest a base price for the 800 MHz spectrum, which is used by CDMA operators such as Sistema.

TRAI had not recommended a reserve price for the 800 MHz band, saying there was no need to auction these airwaves now.

The Telecom Commission had earlier this month suggested fixing a minimum Rs.1,765 crore per MHz as the price for pan-India spectrum in the 1800 MHz band, 15 per cent higher than the TRAI’s suggested rate of Rs.1,496 crore. The base price for 900 MHz should be 25 per cent higher than what TRAI had recommended, the EGoM said on Friday.

Spectrum in this band will cost a minimum of Rs.360 crore per MHz for Delhi, Rs.328 crore for Mumbai and Rs.125 crore for Kolkata.

“The EGoM met today, and we took a final decision on the reserve price and the EGoM has accepted the reserve price recommendations of the Telecom Commission,” Telecom Minister Kapil Sibal told reporters here.

Even after the increase, the reserve price is lower than the failed auction of November, when spectrum in the 1800 MHz band was offered at a base price of Rs.2,800 crore per MHz.

An operator can bid for a minimum of 5 MHz in the 900 MHz band. For the 1800 MHz band, the Minister said a decision would be taken on the quantum to be auctioned after consulting the Department of Telecommunications (DoT) about spectrum availability.

Yet to finalise quantum

“We have to finalise the total quantum of spectrum in the 1800 MHz band that has to be put for auction. That would be decided hopefully at the end of the coming week,” Mr. Sibal said.

The Minister said there would be no reservation for existing operators in the 900 MHz band.

“As far as 900 MHz auction is concerned, there is going to be no reservation. All those who have 900 MHz will be participating in the auction,” he added.

Mr. Sibal said the auction was likely to be held around January 21-22.

On spectrum usage charges, the Minister said the existing regime would be followed.

Mr. Sibal said the method of payment for the spectrum auction would be the same as before: 30 per cent upfront payment for the 1800 MHz band and 25 per cent for 900 MHz.

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