Govt Fixes Rs 14,000 crore as reserve price for 2G spectrum

By August 3rd, 2012 AT 8:37 PM

Govt Fixes Rs 14,000 crore as reserve price for 2G spectrumThe government has set a reserve price of Rs 14,000 crore for the proposed auction of the 2G spectrum, which is at the lower end of the band recommended by the group of ministers on telecom, much lower than the price set by telecom regulator.

The Union Cabinet also approved a levy of 3-8 percent on different slabs as annual spectrum usage charges, which was in line with recommendations of the Empowered Group of Ministers. The decision was taken at the cabinet meeting held today.

The Empowered Group of Ministers, headed by P. Chidambaram (now Finance Minister), had suggested a reserve price at Rs 14,000-15,000 crore for 5 Mhz of airwaves. The Telecom Regulatory Authority of India had recommended a base price of  Rs 18,000 crore.

In a major development, India’s Supreme Court cancelled 122 2G licences provided after January 2008 in on grounds they were issued in a “totally arbitrary and unconstitutional” manner. The court also directed TRAI to make fresh recommendations 2G licence allocations. The companies that lost licences are Uninor (a joint venture between Unitech and Norway’s Telenor), Loop Telecom, Sistema Shyam (joint venture between Shyam and Russia’s Sistema), Etisalat DB (joint venture between Swan and Etisalat of UAE), S Tel, Videocon, Tatas and Idea Cellular.

The apex court had asked the government to conduct fresh auctions by August 31, but meeting this deadline looks extremely difficult. The reserve price would still disappoint the industry, which had been seeking at least 80 percent cut from TRAI recommendations, as the pricing would result in soaring of telecom calls in the country. 

The Cellular Operators Association of India, the GSM operators body, had accused TRAI of “blatantly” ignoring industry representations on spectrum pricing and auction, and continuing to push its flawed recommendations.

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Saurabh

I heard a news on a business channel that Uninor will bid for 9 circles while Videocon is interested in 8 circles, Tata Docomo and Idea in 3 and 9 circles respectively where they have lost license. So there are very little chances of anyone getting PAN-India. But wait, here is some twist in the story, That news also indicated that our very own Mukesh Ambani’s company Reliance Industries will also participate in the auction and if they are participating, I’m sure we can have Reliance as Pan-India license winner. I was just thinking whether it is just a coincidence… Read more »

Rajesh

Even if the govt. gets profit… it goes to some bad hands only… no way of using those money for the people.. always money laundering will happen..

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