DoT may propose seeking Trai view on CDMA auction

The Department of Telecommunications (DoT) may propose to a ministerial panel next week to either seek sectoral regulator Trai's views on auction of telecom spectrum in the CDMA band or auction the radiowaves after GSM spectrum auction due this fiscal.

"It has been discussed that for 800 Megahertz band [CDMA spectrum] there can be two scenarios. First, refer it to Trai for making recommendations and second, hold auction of spectrum in 800 Mhz band in succession to the forthcoming auction of 1800 Mhz and 900 Mhz band [both being used for GSM services]," an official source said.

The proposal will go to an Empowered Group of Ministers (EGoM), headed by Finance Minister P Chidambaram, for final decision only after approval of top authorities at the Telecom Ministry.

EGoM is likely to meet sometime next week.

On December 7, DoT has sought EGoM's decision on action to be taken in the matter of 800 Mhz spectrum but it was deferred by the panel.

The government failed to auction CDMA spectrum at 1.3 times high price to that of GSM spectrum in 1800 Mhz band in auction process that concluded in November. The pan-India price for 5 Mhz of spectrum in 1800 Mhz band was fixed at Rs 14,000 crore.

Supreme Court in February cancelled a total of 122 licences in the 2G spectrum allocation case. It included CDMA licences of Sistema Shyam Teleservices in 21 telecom circles and Tata Teleservices' in three circles.

It was mandatory for these companies to win spectrum in the auction to continue operations in the circles where validity of their licences will end on January 18, 2013; but due to high spectrum price the two companies did not bid for auction.

Tata Teleservices has announced to shut down its CDMA operation in Jammu and Kashmir, North East and Assam.

Services of SSTL, which operates under brand name of MTS, will be impacted if CDMA spectrum matter is referred to Telecom Regulatory Authority of India now as it may take four to six months time to get its recommendation.

SSTL has informed the customers of its intention to continue operations beyond January 18, 2013.

Though there is no clarity on company's operation beyond the deadline set-by apex court, SSTL said it is taking further steps to ensure continued service in India.

SSTL had filed curative petition before the apex court seeking reinstatement of its licences in May, and it is yet to come for hearing.

Russian conglomerate Sistema JSFC, which holds 56.68% stake in the company, has already issued notice to Indian government for resolving the SSTL licence issue.

In a recent communication to the Indian government, Sistema has warned to seek "billions of dollars" in damages from India if licence cancellation issue of SSTL is not resolved in time.