MTS India Finds CDMA Spectrum Reserve Price Disappointing

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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.

MTS India Finds CDMA Spectrum Reserve Price Disappointing

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.

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