The Union Cabinet on Wednesday approved a reserve price of Rs 3,705 crore per megahertz (MHz) for the March 4 auction of the 3G spectrum – which can fetch at least Rs 17,555 crore from this band. “The Cabinet has approved a reserve price of Rs 3,705 crore per MHz for the 2100 MHz band (which is used for 3G mobile services),” telecom minister Ravi Shankar Prasad said.
The Telecom Commission-recommended reserve price is around 11 per cent higher than what telcos paid in the 2010 auction, and about 36 per cent higher than Telecom Regulatory Authority of India (Trai) recommendation of Rs 2,720 crore per MHz pan-India. The Commission had asked Trai to reconsider its recommendations on 3G pricing.
Apart from the 3G spectrum, the government is also going to auction 2G bands (800 MHz, 900MHz and 1800 MHz). Previously, it had approved reserve price for auction of 2G spectrum in 800 MHz, 900 Mhz and 1800 MHz bands that at the minimum rate set would get the government Rs 64,840 crore.
Of these, the government will get Rs 16,000 crore from 2G spectrum sale and Rs 5,793 crore on 3G airwaves this fiscal and the remainder will flow in later, according to a PTI report. The Cabinet had, in a meeting on January 5, approved the auction of 5 MHz in the 2100 MHz band in March, but had not decided on the pricing at that time. The defence ministry has agreed to release 5 MHz in 2100 MHz band in 17 circles. Reacting to apprehensions that auction of only 5 MHz of 3G spectrum will drive bid prices through the roof, Prasad said that the amount of spectrum that is being offered for auctioning is sufficient and that no shortage will result. With PTI