EGoM discusses modalities of spectrum auction
New Delhi, July 13: A high powered ministerial panel on Thursday discussed modalities of auction of telecom spectrum but some issues, including the price for sale of airwaves, could not be finalised.The reconstituted Empowered Group
New Delhi, July 13: A high powered ministerial panel on Thursday discussed modalities of auction of telecom spectrum but some issues, including the price for sale of airwaves, could not be finalised.
The reconstituted Empowered Group of Ministers under Home Minister P Chidambaram deliberated on auction of spectrum for nearly three hours but could not reach finality on the minimum or base price for auction of spectrum.
While it appears that the government may not be able to meet the August 31 deadline set by the Supreme Court for the auction of airwaves, the panel decided to approach the apex court to update it on the status of auction after finalising some parameters.
The court may be asked to extend the August 31 deadline.
“We are moving as quickly as we can and we want to go to Supreme Court to demonstrate to them that as far as we are concerned we are ready with everything and some timeline that we have indicated in our meeting will be met,” Sibal told reporters after the EGoM meeting.
Sibal said that government will try its best to adhere to timeline given by the Supreme Court.
“We will try to stick to the deadline of August 31. But we will inform Supreme Court about all what we have done. We had some discussion on the timeline. We have decided some parameters, which we will fulfil before we move to Supreme Court,” Sibal said.
The EGoM also deferred decisions on staggered payment and network rollout obligations for decision later but decided that airwaves can be mortgaged for raising finance and banks will decide modalities to sell it case of payment failure.
“As far as mortgage of spectrum is concerned, in the event their is default and the spectrum is mortgaged with the bank... its the bank that will take care of auction. The architecture of auction will be discussed in consultation with DoT,” Sibal said adding the panel may meet again on Monday or Tuesday.
Sibal said, “We will be probably meeting again on Monday or Tuesday.”
TRAI also made a presentation to the EGoM on the impact on of its recommended sale price of spectrum on tariffs.
The regulator presented Delhi as an example where oncertain parameters “a tariff hike of 15 paise is required to substantially restore the pre-impact profitability position.”
The regulator had recommended a minimum price for auction of spectrum of over Rs 3,622 crore for a unit of airwaves which amounts to over Rs 18,000 crore for a pan-India operation in case of a new entrant.
Trai has recommended to fix double of this amount as minimum price for the airwaves that existing telecom operators use to provide wireless services at the time of renewal of their licences.
“The foregoing analysis prompts the conclusion that the additional impact arising on account of the current recommendations would largely be neutralised by a tariff hikeof 5 paise,” TRAI said in its presentation.
EGoM has asked Department of Telecom (DoT) and Telecom Regulatory Authority of India (TRAI) to work on the timeline by which winner of airwaves should roll-out their network
across country for services.
TRAI has recommended stringent deadline for network roll-out which was opposed by potential new bidders like Norwegian firm Telenor, major stakeholder in Uninor.
Sibal said that EGoM will decide on the matters that will be referred to cabinet for final call.
The reconstituted Empowered Group of Ministers under Home Minister P Chidambaram deliberated on auction of spectrum for nearly three hours but could not reach finality on the minimum or base price for auction of spectrum.
While it appears that the government may not be able to meet the August 31 deadline set by the Supreme Court for the auction of airwaves, the panel decided to approach the apex court to update it on the status of auction after finalising some parameters.
The court may be asked to extend the August 31 deadline.
“We are moving as quickly as we can and we want to go to Supreme Court to demonstrate to them that as far as we are concerned we are ready with everything and some timeline that we have indicated in our meeting will be met,” Sibal told reporters after the EGoM meeting.
Sibal said that government will try its best to adhere to timeline given by the Supreme Court.
“We will try to stick to the deadline of August 31. But we will inform Supreme Court about all what we have done. We had some discussion on the timeline. We have decided some parameters, which we will fulfil before we move to Supreme Court,” Sibal said.
The EGoM also deferred decisions on staggered payment and network rollout obligations for decision later but decided that airwaves can be mortgaged for raising finance and banks will decide modalities to sell it case of payment failure.
“As far as mortgage of spectrum is concerned, in the event their is default and the spectrum is mortgaged with the bank... its the bank that will take care of auction. The architecture of auction will be discussed in consultation with DoT,” Sibal said adding the panel may meet again on Monday or Tuesday.
Sibal said, “We will be probably meeting again on Monday or Tuesday.”
TRAI also made a presentation to the EGoM on the impact on of its recommended sale price of spectrum on tariffs.
The regulator presented Delhi as an example where oncertain parameters “a tariff hike of 15 paise is required to substantially restore the pre-impact profitability position.”
The regulator had recommended a minimum price for auction of spectrum of over Rs 3,622 crore for a unit of airwaves which amounts to over Rs 18,000 crore for a pan-India operation in case of a new entrant.
Trai has recommended to fix double of this amount as minimum price for the airwaves that existing telecom operators use to provide wireless services at the time of renewal of their licences.
“The foregoing analysis prompts the conclusion that the additional impact arising on account of the current recommendations would largely be neutralised by a tariff hikeof 5 paise,” TRAI said in its presentation.
EGoM has asked Department of Telecom (DoT) and Telecom Regulatory Authority of India (TRAI) to work on the timeline by which winner of airwaves should roll-out their network
across country for services.
TRAI has recommended stringent deadline for network roll-out which was opposed by potential new bidders like Norwegian firm Telenor, major stakeholder in Uninor.
Sibal said that EGoM will decide on the matters that will be referred to cabinet for final call.