Decision on re-auction of 1800 MHz today, will govt lower prices?

New Delhi: Will the Government now hold another auction for 1800 MHz spectrum band, at least in four circles of Delhi, Mumbai, Rajasthan and Karnataka, by lowering spectrum price?

This is among the many crucial decisions on spectrum pricing scheduled to be taken at a meeting of the Empowered Group of Ministers (EGoM) headed by P Chidambaram.

There has been growing uncertainty over whether another auction will happen or not, with the Telecom Ministry yet to seek views of sector regulator TRAI on pricing spectrum lower in these four circles.

[caption id=“attachment_539373” align=“alignleft” width=“380”]  There has been growing uncertainty over whether another auction will happen or not, with the Telecom Ministry yet to seek views of sector regulator TRAI on pricing spectrum lower in these four circles. Reuters[/caption]

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Minister Kapil Sibal has said these auctions would be completed by March 2013, but unless a new price formula is worked out for the four circles in question, how will the auction process move forward?

Since TRAI has already indicated it is not in favour of pricing spectrum any lower than the Rs 14,000 crore it recommended for the first round of auction, there is really very little Sibal can do other than sending a fresh reference to TRAI.

If this is done, the process of consultation and final recommendations could take months - perhaps breaching the March 2013 deadline.

Besides deliberating on this tricky issue of pricing of the 1800 (2G) spectrum band, today’s EGoM meeting is also expected to consider the way forward for the CDMA (800 mhz) band.

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Since the Government priced CDMA spectrum at 1.3 times the 1800 band price, there were no takers for it and no auction was held.

Sibal has already indicated that the 800 mhz band spectrum could be priced lower for another auction to be held and this issue may also get referred to the TRAI again.

But there is a catch: the big GSM telcos Bharti, Vodafone and Idea have, meanwhile, petitioned the Government to allow GSM operations in the “extended” 880 mhz band, which could impede any further growth of the CDMA industry.

This issue may also come up for discussions in today’s EGoM meeting.

A third issue related to spectrum pricing to be discussed today is a way to refund those telecom companies (Like Etisalat) which lost licences after a Supreme Court order but did not participate in the just-concluded 2G auctions. They have been seeking a refund of the licence fee.