Telecom EGoM recommends lower reserve price for spectrum

Telecom Lead India: The Empowered Group of Ministers on
Telecom has recommended lower reserve price for auction of spectrum to the


TRAI’s reserve price was around Rs 18,000 crore.


According to highly placed sources, the difference in
price is not significant and the EGoM decision will affect all telecom
operators in India if the Cabinet finally decides to accept EGoM


The EGoM has sent their views on key issues like reserve
price, spectrum usage charge and terms of payment to the Union Cabinet headed
by Prime Minister Manmohan Singh for a decision.


The TRAI recommended a base price of Rs 3,622 crore per
MH for the auction of spectrum vacated after Supreme Court canceled 122
licences. TRAI’s base price translated to over Rs 18,000 crore for a pan-India
spectrum for new companies.


The EGoM discussed three specific issues. The EGoM is
going to make a specific recommendation on each of these issues to Cabinet so
that Cabinet decides on it finally,” said telecom minister Kapil Sibal.


Telecom companies bidding in the auction will pay an
annual fee for using airwaves, besides the price at which they buy the


The Indian telecom industry asked the government to cut
reserve price by 80 percent cut as they felt TRAI recommended rates would lead
to upto 100 per cent hike in mobile telephone charges.


Recently, the EGoM had asked the Department of
Telecommunications to prepare a matrix of reserve price in the range of Rs
12,000 crore to Rs 18,000 crore and do an impact analysis on government revenue
at different rates as well as on mobile tariff.


As per the EGoM recommendation, winners will have the
option to make deferred payment of charges as suggested by TRAI.


In this case, telecom companies will pay a certain amount
of money upfront for the spectrum and the rest over a certain period of time
along with interest.


EGoM did not take any decision on the one-time fee that
DoT had proposed to levy on existing telecom operators by making changes in
their licence conditions.


According to a report in, GSM industry body COAI said that the new
model being considered to fix spectrum base price will lead to hike in tariffs.


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