SSTL sticks to demand for spectrum price at Rs 1,658 cr

Sistema Shyam Teleservices, India telecom venture of Russian conglomerate Sistema, today stuck to its demand of keeping the minimum price of airwaves for pan-India CDMA services at Rs 1,658 crore, after government raised it by over ten times.

"Supreme Court...Order had directed that true market price of the spectrum should be discovered through auction.

"Hence, the reserve price for spectrum should be Rs 1,658 crores and any change in this pricing contradicts the spirit of the same order," SSTL President and CEO Vsevolod Rozanov said in a statement.

The Cabinet has approved a minimum price of Rs 18,200 crore for 5 Mhz spectrum in 800 Mhz being used for CDMA services.

The company's Indian partner paid Rs 1,658 crore in 2008 for a similar size of spectrum for getting pan-India telecom services permits, before 21 out of its 22 licences were cancelled by Supreme Court.

Rozanov said there is no "rationale" to support the decision of pricing 800 Mhz CDMA spectrum 1.3 times more than GSM's 1,800 Mhz spectrum.

The Cabinet has also fixed GSM airwaves (1800 Mhz) band at Rs 14,000 crore for 5 Mhz spectrum.

The SSTL president claimed the GSM spectrum being put up for auction is liberalised whereas the 800 Mhz CDMA spectrum continues to be non-liberalised.

As per government provision, telecom operators having liberalised spectrum can provide any kind of wireless telecom services.

Rozanov said SSTL's issue is different from those of other mobile operators.

The company has filed a curative petition in Supreme Court seeking reinstatement of its licences.

"I am hopeful that the highest court of the land will look into the merits of SSTL's case and will give us justice," he said.

Sistema, which holds 56.68% stake in SSTL, has served notice to Indian government alleging failure to protect its investment in the country, in violation of international agreement.

The Russian government holds 17.14% stake in SSTL.

The 2G telecom licenses are valid till September 7 and the company would need to buy spectrum through the auction that is due as per Supreme Court order.

Moscow has hinted linking Indian investment in Russia's oil and gas to the spectrum issue.

Sistema says  it has invested over $3 billion in Indian telecom business and employees 3,500 people.

According to sources, Sistema has also asked Indian government to support its curative petition for reinstating its licences.