EGoM meet to finalise base spectrum price on June 21

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The Empowered Group of Ministers on telecom, headed by Finance Minister Pranab Mukherjee, will meet on June 21 to decide on the base price of auction of spectrum, sources said.

"It (EGoM meet) is scheduled for June 21 evening," a source said. The meeting was expected to be held on June 20.

The meeting is crucial for the telecom sector as the EGoM will decide on the future course of action by companies.

The issues, specially pricing of spectrum, have to be sorted this month so as to meet Supreme Court set deadline of August 31 to complete spectrum auction. Also, Mukherjee would resign before he files nomination for the post of President after the return of the Prime Minister from his foreign trip on June 23.

Sectoral regulator TRAI, following a consultation process with industry, recommended the base price of Rs 3,622 crore for a megahertz of airwaves frequencies to be auctioned and over Rs 18,000 crore price for pan-India operations. Bidders for spectrum used for CDMA services will have to pay double of this price as per last decision taken by Telecom Commission, inter-ministerial panel at telecom ministry.

Service providers both CDMA and GSM players have opposed the high spectrum price. The industry feels that high spectrum price will increase the tariff of telecom services in the range of 30 to 100 per cent.

Sistema JSFC, majority stakeholder in Sistema Shyam Teleservices (SSTL), has said that it will quit India telecom business if the minimum price for bidding is not brought down to reasonable level.

SSTL is one of the companies whose mobile services permits were cancelled by the Supreme Court in February. They will have to obtain spectrum through auction to continue their services.

The pricing decision is crucial for existing 2G GSM service provider like Bharti Airtel, Vodafone, Idea Cellular and others, as government has proposed to redistribute airwaves being used by them at the time of renewal of their licence at double of the minimum price recommended by Trai.

In the last meet held on June 5, sources said the EGoM has firmed up the schedule for the auction of 10 Mhz of airwaves in 8 slots of 1.25 Mhz each in the frequency band, which is currently used for 2G GSM services. The EGoM also finalised the auction 3.75 Mhz of airwaves in the frequency band currently used for CDMA services.