Spectrum price increase by 15% in 1800 Mhz and 25% in 900 Mhz to impact telecoms

Telecom Commission’s recommendation to increase the spectrum reserve price by 15 percent more than the price suggested by regulator TRAI in the 1800 Mhz band, and by 25 percent in the 900 Mhz band will impact mobile operators such as Airtel, Vodafone, Idea Cellular, etc.

The Commission has also recommended allowing mergers with a combined market share of up to 50 percent. Full details of M&A guidelines are yet to be officially announced.

India plans to conduct its next mobile phone spectrum auction in January 2014 and has estimated revenue of Rs 11,000 from the sale of airwaves.

Telecom tower

Following the Telecom Commission recommendation, a ministerial panel and the cabinet will finalize the new reserve prices. Though the spectrum price recommendation — is approved by the cabinet — will impact telecom operators, mobile operators and their associations are yet to respond.

Meanwhile, Sistema Shyam TeleServices has welcomed the decision of the Telecom Commission to auction the 800 Mhz spectrum band.

Earlier, TRAI has recommended a sharp cut in the auction reserve prices after most carriers stayed away from bidding in the last two auctions saying the reserve price was too high.

Reuters reported that India is in the process of finalising rules for mergers and acquisitions in the telecommunications market of around a dozen players, and the government has said previously it will ease rules to help consolidate the crowded market.

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