The Empowered Group of Ministers (EGoM), led and presided by P Chidambaram, the Home Minister has made propositions regarding the lowering of the reserve spectrum price. It has proposed to auction the price of spectrum to Rs. 14,000 crore to Rs. 16,000 crore. Previously, the Telecom Regulatory Authority of India (TRAI) had made recommendations that the reserve price of the 2G airwaves to be set to about Rs. 18,000 crore. This proposal was reported after a meeting was conducted in Delhi on Friday.
Anyhow, the Empowered Group of Ministers did not take any final decision regarding the one-time spectrum fee while the decision is to be finalized in upcoming meeting next week. The EGoM also agreed to delayed mode of payment for the winners of the auction and with this, the operators are likely to pay 25 to 30 % of the price of spectrum and then pay the rest amount in installments with 8 years.
The Department of Telecommunications suggested this deferred mode of payment with which the telecom operators have to pay a spectrum utility fee of 3 to 6 % of their annual revenues additionally. Well, the operators featuring the GSM network have pay about 35% of their offer amount initially whereas the CDMA operators will have to pay about 25%. The telecom operators will be granted a suspension of two years on grounds of balance payment after which it can be spread out over a period of 10 years.
The Empowered Group of Ministers made discussions on three specific issues which are the reserve price, Spectrum usage charges and the Terms of payment. The EGoM is all set to make specified proposals based on each of these problems to the Cabinet for it to decide. At first, the Empowered Group of Ministers will display all the options to the Cabinet regarding the upcoming auction for a final decision so that it meets the deadline set by the Supreme Court. At the same time, the apex court has ordered the Government to close the auction by the 31st of August.