EGoM refers spectrum reserve pricing to Trai

Move likely to delay auctions by few months

Written by ENS Economic Bureau | New Delhi | Published: June 27, 2013 3:31 am

An empowered group of ministers (EGoM) today asked the Telecom Regulatory Authority of India (Trai) to discover the reserve price for spectrum,to be sold in the forthcoming auction,within 60 days.

“We would request Trai to give its recommendations before the end of 60 days,as the government is very keen to move forward and sell the spectrum,” telecom minister Kapil Sibal . It is,however,unlikely that Trai would be able to give its recommendations within 60 days,as Section 11(d) of the Telecom Broadcasting and Cable Law,the regulator cannot revise its recommendations on spectrum pricing and go through the process again.

Trai will now have to be asked to examine the matter afresh without any reference to the existing recommendations. This means there will be a long procedure of consultations with the industry followed by a consultation paper and so on and could stretch to at least four months at a conservative estimate. This delay in auctions may be a bad news for the government but a blessing in disguise for the telecom companies,as they would have found it difficult on their existing balance sheets to raise more loans to bid in a third auction.

The Department of Telecommunications is required to conduct third round of spectrum auction in 20 out of 22 service areas to comply with the Supreme Court order of February 15,2013. The court order asked the government to auction entire spectrum that was freed from 122 2G licences that were canceled by the apex court.

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