Sistema Shyam asks govt to rethink base price for 800-MHz spectrum

TC has suggested the base price of 1800MHz band radiowave at Rs 2,191 cr per MHz

Sistema Shyam Teleservices, the lone operator using the CDMA technology at present, on Wednesday asked the government to reconsider the 800-MHz spectrum base price, which it suggested should be on par with the market-discovered price of 1,800-MHz spectrum.

In a statement, Sistema Shyam said it might not be possible to find takers for 800-MHz spectrum in the 2015 auctions at such a high price. This price had been tested in the market previously, too, in November 2012. “We would urge the government to rethink on the spectrum price for the 800-MHz band and bring it on par with the market-discovered rate for 1,800-MHz band,” it added.

At a meeting earlier this week, the Telecom Commission had recommended the base price for 800-MHz airwaves be fixed at Rs 3,646 crore per MHz (pan-Indian), about 17 per cent more than what the Telecom Regulatory of Authority of India (Trai) had recommended last month. Meanwhile, Trai suggested reserve price was about 15 per cent higher than what it had recommended in February. Last month, the regulator had suggested the reserve price to be Rs 3,104 crore, 72 per cent higher than the Rs 1,800-crore rate in the 2013 auction. 

The Telecom Commission suggested the base price for 1,800-MHz spectrum should be Rs 2,191 crore per MHz across 20 telecom zones.

“It is not in sync with the business and ecosystem realities. The proposed pricing of Rs 3,646 crore per MHz is way out of line and does not merit a strong business case for buying spectrum in the band,” Sistema Shyam, which operates under the MTS brand in India, said in its statement.

If such a pricing framework was implemented it would be seen as going against the spirit of the prime minister’s vision for Digital India and broadband for all, the company added.

In January last year, the government had reduced the base price for 800-MHz spectrum by 50 per cent to Rs 1,820 crore per MHz (pan-Indian) to attract bidders. But it had found only one bidder, Sistema Shyam, which acquired spectrum only in select circles.