CDMA spectrum auction may fetch more than Rs. 9,500 crore revenue

By Kul Bhushan | Published on 21 Jan 2013
  • Slashing the base price for the next round of spectrum sale is likely to prompt more competitive bidding and help generate good revenue.

CDMA spectrum auction may fetch more than Rs. 9,500 crore revenue

Despite reducing the reserve price for the forthcoming CDMA spectrum auction by half, the government is estimated to get more than Rs. 9,497 crore from the next round of bidding and one-time licence fee on existing operators.

As per the estimate, about Rs. 6,463.95 crore is likely to come from the auction (if sold at the revised starting price) and Rs. 3,033.20 crore from the one-time spectrum fee that has been imposed on the existing operators.

The government is mulling over giving an option of deferred payment to the bidders of the CDMA spectrum. The option will enable operators to have shell out 25 percent of the bidding amount, as per the recommendations of the Telecom Regulatory Authority of India. In this scenario, the auctions are likely to fetch Rs. 1,615 crore.

The companies that will be up for the one-time licence fee w.e.f January 1, 2013 are Reliance Communications, Tata Teleservices, Sistema Shyam and both state-owned telecom operators BSNL and MTNL.

RCom will be paying approximately Rs. 1,752 crore for the additional CDMA spectrum whereas Tata Teleservices will be paying about Rs. 1,155 crore. Amount to be shelled out by other players are not yet known.

Succumbing to the demand by the telecom operators, the government last week halved the base price for the sale of 800MHz spectrum used for CDMA services in the country. It may be noted that the government had kept the base price 11 times higher. A lot of players including Videocon and Tata Teleservices distanced themselves from the November 2012 bidding on the grounds of steep pricing.

The government has already approved a 30 percent cut in the base price of spectrum in the 1800MHz band in telecom circles that saw no buyers in the November auctions. The unsold circles include Delhi, Mumbai, Rajasthan and Karnataka.

The government aims to finalise the auction guidelines and procedure for the forthcoming auction are expected to be finalised by February 11.

Source: Hindustan Times

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