Telecom spectrum reserve price decision deferred again

Telecom Lead India:
Ministers’ panel has deferred its decision on the spectrum reserve price for
the upcoming airwaves auction.

Since the present finance minister Pranab Mukherjee, who
heads the EGoM, will be contesting for Presidential poll and resigning as FM,
the delay raises concerns that the government may not be able to meet the
August 31 deadline set by the Supreme Court to complete the sale process. 

Finance ministry’s office sought cancellation of the Thursday meet.

At the Thursday’s meet, telecom regulator TRAI was slated to
make a presentation on the impact of spectrum costs on tariffs, viability of
mobile phone companies and government revenues to the members of the EGoM.

With the meeting being cancelled, TRAI submitted its
analysis to the DoT. 

TRAI earlier said that higher spectrum costs would only lead to a 4-6 paise per
minute increase in tariffs annually over a 20-year period.

TRAI’s new chairman Rahul Khullar, in its analysis, said
that a 10 paise per minute increase in call rates annually would help mobile
phone companies offset spectrum costs. 

Prime Minister’s Office also asked the finance ministry that the panel of
ministers on spectrum should take a decision on the reserve price for airwaves
and other policy issues related to the auctions before Mukherjee’s exit. 

The delay in fixing the reserve price will add to the uncertainties faced by
operators such as Telenor, Sistema and Videocon among others whose licences
were cancelled by SC earlier this year.

These operators say their participation in the auctions to
get back their licences will depend on the base price, rollout obligations and
other policy issues such as permitting staggered payment, Economic Times

The Indian telecom industry has been demanding a significant reduction in the
TRAI specified base price of Rs 3,622 crore per unit of spectrum in the 1800
MHz band, which amounts to over Rs 18,000 crore for pan-India licence for
companies whose permits were quashed by SC in February.

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