There are approvals from the Union Cabinet that the minimum price for the most awaited auction of 5 MHz of pan-India 2G spectrum be Rs.14000 crore. This goes the same way according to the early recommendation of the Empowered Group of Ministers (EGoM) which was supervised by P. Chidambaram. The details of the decision and price are discussed below in details.
Earlier, the EGoM had recommended for a lesser reserve price for the spectrum in between Rs.14000 Crore to Rs.16000 Crore. Before that, the Telecom Regulatory of India (TRAI) had made recommendations for a reserve price of about Rs.18000 Crore to the 2G airwaves accounting 22% higher than the recommendation of the EGoM. As amatter of fact, on the 2nd of February of 2012, about 122 spectrum licenses were cancelled by the Supreme Court of India.
The companies affected by this cancellation are Uninor, Loop Telecom, Sistema Shyam, Etisalat DB, S Tel, Videocon, TTSL and Idea Cellular. The cancellation issue was filled by A.Raja, former Telecom Minister as these companies were claimed to be manipulated. Consequently, the apex Court also made orders to the Telecom Regulatory of India (TRAI) in oirdeert to auction the airwaves. Apart from these, the Cabinet was also pleased with this reserve price of about Rs.18200 crore which was for the 800 megahertz band used for CDMA services at present. This was recommended by the EGoM and is about 1.3 times of the price of the 1800 MHz band.
Somehow or the other, it looks as if the Telecommunication Corporations are not likely to agree with this base price because they will undergo a lot of financial stress once this base price is imposed. They will have to increase the mobile tariff. The reserve price of pan-India 2G spectrum auction being finalized, the Empowered Group of Ministers will be meeting on Monday in order to decide the schedule for auction.