Assocham Raises Concern Over 900MHz Base Price

Industry chamber Assocham has written to Prime Minister Narendra Modi expressing its concern over the cabinet's decision to raise the reserve price for 900MHz spectrum in the upcoming spectrum auction Feb 25.

"The industry is deeply concerned with the cabinet's decision to raise the reserve price for 900MHz. The reserve prices for the proposed auction of spectrum in the 900MHz 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 900MHz 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 1800MHz bands and finalised its reserve prices.

"The reserve price approved is Rs.3,646 crore pan-India per MHZ in 800MHz, Rs.3,980 crore for 900MHz band pan India excluding Delhi, Mumbai, Kolkata, and Jammu and Kashmir; Rs.2,191 crore pan India (excluding Maharashtra and West Bengal) in 1800MHz band," an official statement said earlier.

The quantum of spectrum to be put to auction is 103.75MHz in 800MHz band in all service areas, 177.8MHz in 17 licence service area (LSA) in 900MHz band and 99.2MHz in 15 LSAs in 1800MHz band. Thus a total of 380.75MHz in 800, 900 and 1800MHz is being put to auction, it added.

The estimated revenues from this auction are Rs.64,840 crore (excluding 2100MHz spectrum) of which Rs.16,000 crore is expected to be realised 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 2100MHz 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 perMHz in the 2010 auction of 3G spectrum.

It again reiterated its stand on the pricing Jan 15.