2G: EGoM draws a blank, no decision likely before prez polls

The base price for spectrum auctions has become such a hot potato that the government may not take a call on it till after the Presidential elections are over.

Though no one is saying so specifically, today was the second meeting of the Empowered Group of Ministers (EGoM) which chose not to take any call on pricing of 2G spectrum. This, despite the Supreme Court deadline of August 31 to complete auctions drawing nearer - the Department of Telecom (DoT) will have no option left but to seek an extension of this deadline.

Sector regulator TRAI has recommended Rs 3622 crore per mhz of spectrum as the base price for 2G auctions, something which has been vehemently contested by telcos.

Today’s meeting also failed to take a call on whether incumbent telecom operators should be charged for spectrum at new rates - DoT had offered several options on this issue after it was decided earlier that incumbents would not be charged retrospectively.

Sources tell us that in the meeting today, TRAI chief Rahul Khullar did make a presentation on the impact of spectrum pricing where he said that tariffs would rise by about 10 paise in some scenarios. This is much higher than the tariff projection given by the ex-TRAI chairman J S Sarma.

These sources said that in the meeting today, which was chaired by Home Minister P Chidambaram, it was decided that TRAI and DoT will again discuss the issue of tougher roll out obligations for telcos who will participate in the fresh auctions.

The new, tougher norms would have asked operators to cover 20 per cent of block headquarters in their circles within the first two years and another 10 per cent in the third year. Under the current licence conditions, mobile operators are required to cover at least 10 per cent of the district headquarters in the first year and 50 per cent of the districts in three years.

Sources also said that the EGoM agreed on spectrum mortgage norms where banks will be allowed to hold spectrum as collateral for lending to telecom companies.

Speaking after the EGoM meeting, telecom minister Kapil Sibal told reporters that a decision on spectrum pricing would be taken shortly and a an auction timeline would be given to the SC soon. He said the EGoM will meet early next week again to finalise crucial issues which need to be referred to the Union Cabinet.