5.66L-cr mega ` Spectrum plan
Telecom firms call it too high a price for them to buy
New Delhi: The Cabinet on Wednesday set the ball rolling for the biggest spectrum auction by approving the sale of all available airwaves across seven frequencies as well as their pricing, estimated at about 5.6 ` lakh crore. The amount is based on the assumption that all spectrum put on auction is sold at their reserve prices.
The Union Cabinet on Wednesday set the ball rolling for the biggest spectrum auction by approving sale of all available airwaves across seven frequencies as well as their pricing, estimated to be worth about `5.66 lakh crore.
The `5.66 lakh crore amount is based on the assumption that all spectrum put on auction is sold at their reserve prices. In case there is competition among operators this price may go up. But such a scenario presently looks unlikely as operators are claiming that the base price of 700 mhz spectrum is “too high” and their balance sheets are stretched.
“The appetite for India’s telecom sector is very big,” communications and IT minister Ravi Shankar Prasad said, when asked if such a large auction will evoke the kind of interest which the government is hoping for.
This auction will give telecom operators more spectrum to launch 4G services and also improve their services. On the other hand, it will raise revenue for the exchequer and help finance minister Arun Jaitley to meet his tough fiscal deficit target of 3.5 per cent of GDP for the current fiscal.
“This may be the largest ever auction in history of the country. It has been approved,” said Mr Jaitley.
However, the government has decided to refer back to the sectoral regulator Trai the issue of spectrum usage charge (SUC) paid by operators as there was difference of opinion between the views of between Trai and telecom commission on one side and chief law officer Mukul Rohatgi.
Around 2,300 MHz of airwaves will be for auction in seven bands — 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz and 2,500 MHz. This is for the first time that 700 Mhz spectrum will be put for auction but its price may discourage operators.