Rs. 14,000 crore fixed as base price for 2G spectrum auction

August 03, 2012 07:37 pm | Updated November 16, 2021 11:16 pm IST - New Delhi

The Union Cabinet on Friday fixed a reserve (minimum) price of Rs. 14,000 crore for 5 MHZ of pan-India 2G spectrum in the 1800-MHz GSM band for auctioning spectrum to be vacated by companies whose 122 licences were cancelled by the Supreme Court on February 2, 2012.

The reserve price for 5 MHz of CDMA spectrum has been put at Rs. 18,200 crore, 1.3 times the price of GSM spectrum.

Only two slots of 5 MHz each will be put on the block, though spectrum will be available for bidding in multiple blocks of 1.25 MHz.

Taking a bold political decision, the government shaved $750 million, or roughly Rs. 4,100 crore, off the roughly Rs 18,000-crore reserve price recommended by the Telecom Regulatory Authority of India (TRAI).

Winners are required to make an upfront payment of just one-third of the total bid amount for GSM spectrum and one-fourth for CDMA spectrum, with the rest to be paid after a two-year moratorium in 10 equal, annual instalments.

The government has further retained the present slabs for spectrum usage charge, which ranges from 2 per cent to 8 per cent, depending on the quantum of spectrum held by the operator.

Telecom Minister Kapil Sibal said: “This [the reserve price] is only the starting point of the auction. And I have absolutely no doubt that the auction itself will give us a much higher price.”

The pace at which the auction preparation and the auctioneer’s appointment is proceeding suggests that the Centre will miss the Supreme Court-approved second extension of the August 31 deadline too, pushing the auction to October-December.

0 / 0
Sign in to unlock member-only benefits!
  • Access 10 free stories every month
  • Save stories to read later
  • Access to comment on every story
  • Sign-up/manage your newsletter subscriptions with a single click
  • Get notified by email for early access to discounts & offers on our products
Sign in

Comments

Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.