Government plans to ask operators to pay market rate for 2G spectrum

Telecom Lead India: In order to create a level playing
field, the Indian government could ask mobile phone companies to pay
auction-discovered price for the 2G spectrum for the remaining period of their


It is expected that the move will force these companies
to shell out several thousands of crores if the Cabinet approves the
policy change proposed by the communications ministry, reported Economics


According to an official, the DoT will present
a note to the Cabinet on this issue next week.


If Trai’s pricing is accepted by the EGoM, telecom
companies that lost permits following the Supreme Court order must pay a
minimum of Rs 3,622 crore for every unit of 2G airwaves in the upcoming auctions.


However, operators whose permits were not scrapped have
not been subject to any market-determined fee for the airwaves they currently
hold. The official added that the method they are proposing will ensure
all operators pay the same price for airwaves.


Incumbents such as Bharti, Vodafone and Idea, and
dual-technology players such as Reliance Communications and Tata
Teleservices could pay the auction-determined price for the entire spectrum
they have in the 1800 MHz band and extend the validity of their licences by 20


Although, this is not applicable to the 2G spectrum held
by incumbents in the 900 MHz band. Here, they have to pay the
auction-determined price only for the remaining tenure of the licence.


This band will be refarmed (redistributed to all
companies through an auction process) when mobile permits come up for renewal
beginning 2014,” said the official.


EGoM to meet on June 5 over spectrum auction price issue


The Telecom Commission will present the Empowered Group
of Ministers (EGoM) headed by finance minister Pranab Mukherjee, the
option of halving the airwaves tenure to 10 years, which if accepted will lower
amounts for airwaves in the upcoming auctions.

Last week, the Telecom Commission, the highest decision-making body of the
communications ministry, failed to reach a verdict on the reserve price
recommended by TRAI.

The commission decided to ask the Empowered Group of Ministers on spectrum
auction, headed by Finance Minister Pranab Mukherjee, to fix the reserve


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