The Empowered Group of ministers (EGoM) headed by finance minister Pranab Mukherjee today cleared a decision to auction 10 Mhz of 2G spectrum in eight blocks of 1.25 Mhz each. However, they have put off a decision on the contentious issue of determining the reserve price for the spectrum.
A senior official who was present in the meeting said:
He also said that Trai did not make any presentation on the likely impact of the base price circle by circle on the costs of the operators as was asked by the Department of Telecommunications (DoT).
Coming out of the over one hour long meeting Telecom Minister Kapil Sibal who came out of the meeting merely said: “Some decisions have been made, which you will come to know soon."
EGoM was also asked to take a decision on whether it should auction 10 Mhz of spectrum after keeping spectrum for refarming across all circles. Trai had initially recommended auctioning of only 5MHz of spectrum.
The Telecom Commission had last month put the onus on deciding about the contentious issue of fixing the base price for auction of 1800 Mhz of 2G band spectrum in the court of the Empowered group of ministers (EGom) headed by Pranab Mukherjee .
It also asked the regulator to study the impact of the increase in the spectrum price on cost in each of the 22 circles separately and also the viability of the operators. The Trai under ex-chairman J S Sarma had already conducted a study on the impact of the spectrum base price across the circles, which came to only 4 paisa to 6 paisa per minute.
DoT also asked the regulator to give its view on reducing the validity of the spectrum for 10 years instead of 20 years in order to reduce the financial burden on the operators.
Telecom companies, however, have made a scathing attack on the regulators recommendation of fixing the base price for auction at Rs 3,622 crore per MHz which is nearly 10 times of what they have paid earlier. This the GSM operators said would lead to an average increase in tariffs of consumers by 26 paisa and as high as 90 paisa per minute in metros.
The Telecom Commission however has accepted the regulator’s new recommendation in which it has suggested that spectrum charges should be increased from the earlier suggested 1% to 3%.
It has also endorsed the regulator's suggestion to increase the base price for 800 Mhz at two times that of the 1800 MHz spectrum.
However, the Telecom Commission rejected the plea by the regulator to offer operators a deferred payment scheme over twelve years to reduce their burden saying that this is not workable. It however accepted the suggestion that mortgaging of spectrum to raise loans should be allowed.
While accepting refarming of spectrum from the 900 Mhz band which would impact incumbent operators, it also accepted the regulators decision to go for a liberalized spectrum regime. Under this for instance 1800 Mhz of spectrum could be used by the operator for 2G as well as LTE -4G services.
As per Supreme Court order, the government has to conduct auction by August 31, following its decision to cancel 122 licenses issued in January 2008.
8 blocks of 2G spectrum to be auctioned
A senior official who was present in the meeting said:
He also said that Trai did not make any presentation on the likely impact of the base price circle by circle on the costs of the operators as was asked by the Department of Telecommunications (DoT).
Coming out of the over one hour long meeting Telecom Minister Kapil Sibal who came out of the meeting merely said: “Some decisions have been made, which you will come to know soon."
EGoM was also asked to take a decision on whether it should auction 10 Mhz of spectrum after keeping spectrum for refarming across all circles. Trai had initially recommended auctioning of only 5MHz of spectrum.
The Telecom Commission had last month put the onus on deciding about the contentious issue of fixing the base price for auction of 1800 Mhz of 2G band spectrum in the court of the Empowered group of ministers (EGom) headed by Pranab Mukherjee .
It also asked the regulator to study the impact of the increase in the spectrum price on cost in each of the 22 circles separately and also the viability of the operators. The Trai under ex-chairman J S Sarma had already conducted a study on the impact of the spectrum base price across the circles, which came to only 4 paisa to 6 paisa per minute.
DoT also asked the regulator to give its view on reducing the validity of the spectrum for 10 years instead of 20 years in order to reduce the financial burden on the operators.
Telecom companies, however, have made a scathing attack on the regulators recommendation of fixing the base price for auction at Rs 3,622 crore per MHz which is nearly 10 times of what they have paid earlier. This the GSM operators said would lead to an average increase in tariffs of consumers by 26 paisa and as high as 90 paisa per minute in metros.
The Telecom Commission however has accepted the regulator’s new recommendation in which it has suggested that spectrum charges should be increased from the earlier suggested 1% to 3%.
It has also endorsed the regulator's suggestion to increase the base price for 800 Mhz at two times that of the 1800 MHz spectrum.
However, the Telecom Commission rejected the plea by the regulator to offer operators a deferred payment scheme over twelve years to reduce their burden saying that this is not workable. It however accepted the suggestion that mortgaging of spectrum to raise loans should be allowed.
While accepting refarming of spectrum from the 900 Mhz band which would impact incumbent operators, it also accepted the regulators decision to go for a liberalized spectrum regime. Under this for instance 1800 Mhz of spectrum could be used by the operator for 2G as well as LTE -4G services.
As per Supreme Court order, the government has to conduct auction by August 31, following its decision to cancel 122 licenses issued in January 2008.
8 blocks of 2G spectrum to be auctioned