No decision on auction of airwaves in 800 Mhz band: Sibal
A ministerial panel on telecom, on Friday, decided to lower the base price of spectrum in the 1800 Mhz band by 30 per cent in four circles for a fresh auction this fiscal. This is a suggestion that could fetch the exchequer Rs. 6,200 crore. These four circles — Delhi, Mumbai, Karnataka and Rajasthan — were some of the most expensive circles in last month’s 2G spectrum auction and had attracted no bidders.
“The Empowered Group of Ministers (EGoM) has decided to reduce the reserve price by 30 per cent in the four circles in the 1800 MHz band, where spectrum remained unsold,” a top source said.
The reserve price for last month’s sale per block in Delhi was Rs.693.06 crore, while the same for Mumbai, Karnataka and Rajasthan was fixed at Rs.678.45 crore, Rs.330.12 crore and Rs.67.08 crore, respectively.
The EGoM also decided to auction spectrum in 900 MHz band in Delhi, Mumbai and Kolkata.
“The EGoM met on Friday and we have decided to auction the 900 MHz band in Mumbai, Kolkata and Delhi,” Telecom Minister Kapil Sibal told reporters here.
Cabinet to approve
He added that a decision on the pricing had been taken and “we will now be moving the Cabinet for the approval on the pricing and we have also decided that we will complete the auction process within this financial year.”
Mr. Sibal said no decision had been taken on the auction of airwaves in 800 Mhz band.
The much-hyped 2G spectrum auction was virtually a flop as the government managed to garner bids worth just Rs.9,407 crore as against a minimum target of Rs.28,000 crore.
Compared to the 3G auction, which lasted 35 days and fetched Rs.67,719 crore, the latest round of 2G spectrum auction held in November lasted just two days. Sources said reserve price for 900 Mhz band would be twice that of the auction-discovered price in Kolkata and reserve price in case of Delhi and Mumbai.
On whether circles where some spectrum was sold would also be put for auction, sources said: “There is no question of putting that to auction. The discovered price is already there. If anybody wants spectrum it will be allotted to them at the discovered price.”
Industry experts welcomed the reduction but said selling spectrum in metros could still be a challenge.
“The decision is in the right direction but not far enough. Metros will still be a challenge for making business case. There will be a fallout as those who have purchased spectrum at the old prices may raise objections at the price cut,” Cellular Operators Association of India (COAI) Director General Rajan S Mathews told PTI.
PwC India Executive Director Sivarama Krishnan said the metro cities collectively contribute around 40 per cent of the spectrum auction fees.
But these markets are saturated and a 30 per cent cut still doesn’t make for a meaningful business case for investment, he added. — PTI