2G: EGoM says cut base reserve price by 30% in 4 circles

After the 2G auction turned out to be a failure, the government has decided to cut spectrum reserve price by 30% in four circles. The Empowered group of Ministers (EGoM) met today and after the meeting telecom minister kapil sibal laid out the auction roadmap.

30% reserve price cut won't create much interest: COAI

He said that the ministry will conduct fresh auctions in four circles for 1800 Mhz band. These include Mumbai, Delhi, Karnataka and Rajasthan. Sibal also informed that three circles will be conduct auctions in three circles (Mumbai, Kolkata and Delhi) in 900 mhz band.

Here are the key takeaways of the EGoM.

The Reserve price for four important circles Bombay, Delhi, Karnataka, Rajasthan for the 1800 Mhz band, the EGoM has decided to cut it by 30 percent, the final call will be taken by the cabinet.

The next point is that the reserve price for the 900 Mhz band with respect to refarming, the EGoM has upheld the TRAIs recommendation for that to be twice that of the 1800 Mhz band. The cellular operators wanted that to be same as the 1800 Mhz band. Refarming will start in December 14 in three crucial circles Delhi, Mumbai and Kolkata. It would essentially mean a clear impact for companies Bharti, Idea and Vodafone because they are the three dominant players in these three circles.

As far as the auction is concerned, the decision that seems to have been taken within the EGoM is to conduct an auction once again in March 2013 which would mean after the budget, but within the current financial year. This is for both the 1800 and the 900 Mhz band frequencies.

As far as the 800 Mhz band, popularly referred to as the CDMA band is concerned, there was a demand from the GSM operators that this spectrum be taken away from the CDMA operators. This demand did not see any favourable reflection within the EGoM. The CDMA spectrum that was on offer in the recent auction did not find any takers. The final decision will be taken once formal reference is made by the DoT to the TRAI to decide the new reserve price for the CDMA frequency.
 

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