MTS India CEO says reserve price for spectrum should be Rs 1658 crore

Telecom Lead India: Vsevolod Rozanov, president and CEO,
Sistema Shyam TeleServices (MTS India) said reserve price for spectrum should
be Rs 1658 crore.


MTS India head said given the realistic sectoral
environment and market dynamics, he believes that the reserve price for spectrum
as approved by the cabinet is excessively high.


There is no rationale to support why the 800 Mhz CDMA
spectrum should be priced 1.3 times more than the GSM 1800 Mhz spectrum.


It is significant to note that the GSM spectrum being put
up for auction is liberalized whereas the 800 Mhz CDMA spectrum continues to be
non liberalized. The Supreme Court in its 2nd February 2012 order had
directed that true market price of the spectrum should be discovered through
auction. Hence, the reserve price for spectrum should be Rs 1658 crore and any
change in this pricing contradicts the spirit of the same order.


Sistema Shyam TeleServices has maintained that being a
pure play CDMA operator, its legal case is significantly different compared to
other mobile operators. To protect the interest of more than 16 million
customers, 3500 employees, universe of 300,000 retailers and investments of
over USD 3.1 billion, SSTL has filed a curative petition before the
Honorable Supreme Court.




The base price is unreasonably high and it will impact
the overall industry, which is already going through a rough patch. It will
undermine the agenda of affordable service and we will have no choice but to
pass on the burden,” Bharti Airtel CEO SanjayKapoor told Times of India.


Idea Managing Director Himanshu Kapania said there is no
business case even if the reserve prices were set at Rs 1,650 crore (per Mhz).
Idea is losing Rs 170 crore per quarter in each of the seven circles where our
licences were quashed by the Supreme Court, Economic Times reported.


COAI Director General of the Cellular Operators
Association of India said te high reserve price can impact tariffs by 30 paise
a minute and additional debt of Rs 325,000 crore would have to be raised by
telecom players to fund bids. Banks do not have that kind of bandwidth, Business Standard reported.


Recently, the Cellular Operators Association of India (COAI) warned that the
re-auction of 2G spectrum at Rs 14,000 crore per 5 MHz will impact tariffs to
the tune of 37-49 paise per minute.


The GSM operators’ body also said that the high base
price will increase the total industry debt to anywhere between Rs 370,000
crore to Rs 540,000 crore as per the two separate scenarios provided by


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