Spectrum re-auction: EGoM today a call

Sibal has said these auctions would be completed in March 2013, but unless a new price formula is worked out for the four circles in question, how will the conduct of the auction forward?

Minister Kapil Sibal has said these auctions would be completed in March 2013, but unless a new price formula is worked out for the four circles in question, how will the conduct of the auction forward?

Since Trai all that not in favour of a spectrum prices lower than the reserve price Rs 14,000 crore has indicated the recommended for the first round of the auction, there is really very little Sibal can do is other than to send a new reference to TRAI.

If this happens, the process of consultation and final recommendations may take months-perhaps violating the deadline March 2013.

Another 1800 MHz auction now takes even more meaningful because the Government has received only Rs 1 crore against Rs 40,000 crore, 706.92, had hoped to garner from the first round of the auction and as one-off compensation of spectrum incumbents.
According to a story in the Business Standard on 2 December, the five operators who had bid for spectrum had to fork out Rs 9, 407.64 crore.

They got the whole amount in advance or pay options, however, in a deferred system in which they had to pay only 33 percent upfront and get a moratorium of two years to pay the balance in 10 equal instalments (with 9.75 percent annual interest).

So the Government, received only Rs 1 crore 706.92.

Then, in addition to the debate on this difficult issue of pricing of the spectrum band 1800 MHz (2 G), EGoM are meeting today is also expected that the way forward for the band CDMA (800 MHz).

Since the Government priced CDMA spectrum of 1,3 times the 1800 MHz band price, there were no takers for it and no auction was held.

Sibal has already indicated that the spectrum of 800 MHz band could be priced lower for another auction to be held and this problem can also get submitted back to the TRAI.

But there is a catch: the big GSM telcos Bharti, Vodafone and idea have meanwhile petitioned the Government to GSM operations are performed in the "extended" 880 MHz band, which is a further growth of the CDMA industry could hamper. This problem may also come for discussions in the EGoM are meeting today.

A third issue relating to spectrum pricing be discussed today is a way to telecom companies (such as Etisalat) who lost licenses after a Supreme Court order but did not participate in the 2 G just closed auctions to pay back. They have tried a refund of the license fee.

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