MTS India Finds CDMA Spectrum Reserve Price Disappointing

India’s only pure-play CDMA operator Sistema Shyam Teleservices (SSTL) which operates under MTS India brand name said that reserve price for CDMA spectrum (800 Mhz) as approved by the cabinet is excessively high and would be a disappointment for the CDMA operator.

Mr. Vsevolod Rozanov, President & CEO, Sistema Shyam TeleServices (MTS India) said that “Given the realistic sectoral environment and market dynamics, I believe 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 1800 Mhz spectrum (for GSM).”

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, he added.

He aid that “the Honorable 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 crores and any change in this pricing contradicts the spirit of the same order.”

Rozanov further added “MTS India (SSTL) has consistently 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. I am hopeful that the highest court of the land will look into the merits of SSTL’s case and will give us justice.”

Prior as we shared, Union Cabinet accepted the Empowered Group of Ministers (EGoM) recommendation of pricing 800 Mhz spectrum at 1.3 times the rate of 1800 Mhz band airwave (GSM) which is 14000 crore.This translates into Rs 18,200 crore for pan-India spectrum to offer CDMA services.

The Supreme Court in February canceled 122 telecom licences belonging to eight service providers including all permits of Uninor, Loop Telecom, Etisalat DB, Videocon, STel, 21 licences of Sistema Shyam (MTS), 9 of Spice Communications (now owned by Idea Cellular) and 3 licences of Tata Teleservices.

The auction of spectrum is crucial for MTS India who have time till 7 September to offer their CDMA mobile and Data services and after which will be forced to close down their operations in case they fail to get a fresh spectrum.

Nikhil August 8, 2012 at 9:24 am

Tata and Reliance is prefering GSM subsriber base even they have good CDMA coverage base and infrastrucure. Now they are neglacting their CDMA customer so both are loosing their CDMA subsriber. After aquisition of Aircel, MTS will also neglect its CDMA customers.

JIJO August 7, 2012 at 10:34 pm

Today also i was really irritated by a call from GSM (BSNL) in which the voice was like a banana being smashed( that is like some convoluted voice is coming through) while an important matter was being discussed. So, CDMA should conitue here for those who prefer great voice quality over mobile handsets. East or west, CDMA is the best for it’s unparallaled voice quality( often better and more reliable than a wired connection). I don’t have anything to say about those fools who port out of CDMA. Some times, society is like this- they never accept the best.

kamlesh mehta August 7, 2012 at 10:19 pm

MTS data services is good in city areas but in remote and rural area no good network and not reliable services.

Tushar Gaikwad August 7, 2012 at 10:10 pm

CDMA offers better data network using EVDO….It has better coverage than GSM.
But the market in India is not evolved and aligned to use CDMA voice services…

Sudhakar August 7, 2012 at 10:05 pm

To all :

No. CDMA operators are not even paying any spectrum or license fee for increasing the SPEED from EVDO Rev.A to B and so on. But it is robbing money from the subscribers in the name of high speed internet (3.1 Mbps or more unlimited with (un)fair usage policy) and imposing more than 1 FUP (like docomo CDMA high speed type data card access).

No tax for CDMA operators if they increase their network speed but if GSM operators introduce 3G and 4G they should pay spectrum fees. How is this fair?.

Also all the CDMA operators (except MTNL and BSNL) are forcing the customers to BUY THE MODEM instead of renting them or allowing the customers to use their own modem via CDMA special SIM. Is this a fair practice?. None of the GSM operators force the customers to buy the modem(s).

That too the FUP imposed by CDMA operators is highly UNFAIR. Will you call 20 Kbps, 128 Kbps, 144 Kbps (I mean bits per second in all the cases) a speed after (un)fair usage policy?.

So the CDMA spectrum reserve price MUST BE INCREASED FURTHER with the condition that minimum speed after FUP must be above 256 Kbps in all the cases.

For every 1 Kbps (kilo bits) reduction in the post FUP usage of 256 Kbps (I hope that it should be implemented), the government must collect 1 crore as fine from the operators for not providing promised speed before and after FUP !!!.

Raj August 7, 2012 at 9:17 pm