Telecom panel recommends hike in spectrum auction reserve price

A government panel on Wednesday recommended raising the reserve price for mobile phone spectrum auctions by 15 percent more than the price suggested by a federal regulator in the 1800 megahertz band, and by 25 percent in the 900 megahertz band.

The DoT panel, made up of civil servants, has recommended allowing mergers with a combined market share of up to 50 percent, a senior government official told reporters.

India plans to conduct its next mobile phone airwave auction in January and has estimated revenue of 110 billion rupees from the sale of airwaves.

The telecoms regulator (TRAI) has recommended a sharp cut in the auction reserve prices after most carriers stayed away from bidding in the last two auctions saying the reserve price was too high. A ministerial panel and the cabinet will finalise the new reserve prices.

India is in the process of finalising rules for mergers and acquisitions in the telecommunications market of around a dozen players, and the government has said previously it will ease rules to help consolidate the crowded market.

© Thomson Reuters 2013