Industry
chamber Assocham has written to Prime Minister Narendra Modi expressing
its concern over the cabinet’s decision to raise the reserve price for 900
megahertz (MHz) in the upcoming spectrum auction Feb 25.
“The industry is deeply
concerned with the cabinet’s decision to raise the reserve price for 900 MHz.
The reserve prices for the proposed auction of spectrum in the 900 MHz band in
18 service areas has been increased by 32.5 percent over the reserve prices
recommended by TRAI (Telecom Regulatory Authority of India),” the letter
stated, a copy of which is available with IANS.
The letter was sent to
the prime minister Jan 15 by Assocham secretary general D.S.Rawat.
“The reserve prices for
900 MHz band recommended by TRAI were already too high, and a further
escalation by 32.5 percent is completely unreasonable,” the letter said.
The letter cautioned
that such steep increases would lead to major impact on growth and expansion of
quality networks in coming years and adversely impact the consumer as well
national vision of faster broadband for all and Digital India initiatives.
In December 2015, seven
licences each of Idea Cellular and Reliance Communications, four licences of
Bharti Airtel and six licences of Vodafone will complete their 20-year term
after which they should be renewed.
The cabinet approved the
proposal of the Department of Telecom (DoT) to proceed with auction in 800, 900
and 1800 MHz bands and finalised its reserve prices.
“The reserve price
approved is Rs.3,646 crore pan-India per MHZ in 800 MHz, Rs.3,980 crore for 900
MHz band pan India excluding Delhi, Mumbai, Kolkata, and Jammu and Kashmir;
Rs.2,191 crore pan India (excluding Maharashtra and West Bengal) in 1800 MHz
band,” an official statement said earlier.
The quantum of spectrum
to be put to auction is 103.75 MHz in 800 MHz band in all service areas, 177.8
MHz in 17 licence service area (LSA) in 900 MHz band and 99.2 MHz in 15 LSAs in
1800 MHz band. Thus a total of 380.75 MHz in 800, 900 and 1800 MHz is being put
to auction, it added.
The estimated revenues
from this auction are Rs.64,840 crore (excluding 2100 MHz spectrum) of which
Rs.16,000 crore is expected to be realized in the current financial year
(2014-15).The revenue target from spectrum auction set by the government in the
2014-15 budget is Rs.45,471 crore.
The Assocham also
raised concern over the auction of 2100 MHz or 3G spectrum.
The sector regulator,
TRAI, Dec 31 had recommended a base price of Rs.2,720 crore per megahertz for
2100 Mhz band as against pan-India reserve price of Rs.3,500 crore per MHz in
the 2010 auction of 3G spectrum.
It again reiterated its
stand on the pricing Jan 15.
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