EGoM on spectrum auction to meet on June 21

An empowered group of ministers (eGoM), headed by Finance Minister Pranab Mukherjee, will meet this Thursday to take a final decision on the reserve price of auction of 2G spectrum.

Telecom Commission (TC), the highest policy-making body of the department of telecommunications (DoT), has given two options to the eGoM on the reserve price. One is recommended by the Telecom Regulatory Authority of India (Trai) at Rs 3,622 crore per MHz, or Rs 4,245 crore as suggested by a DoT committee. The last meeting of the eGoM took no decision on this key issue.

On Monday, a senior DoT official confirmed the date of meeting as June 21.

Telecom companies have attacked the regulator’s recommendation of the base price at Rs 3,622 crore per MHz. That, GSM operators said, would lead to an average increase in tariffs of 26 paise per minute and as high as 90 paise per minute in the metros.

Last month, TC had put the onus of fixing the base price for the auction of 1,800 MHz of 2G spectrum on the eGoM. It had asked the regulator to study the impact of the increase in the spectrum price on costs in each of the 22 circles separately and also on the operators’ viability. Trai is yet to submit its views on this.

As part of its recommendations, Trai, under the chairmanship of J S Sarma, had said the impact on the cost of telcos would be minimal at around four to six paise a minute. However, the regulator has got a new chairman now, Rahul Khullar, who was earlier a commerce secretary.

By a Supreme Court directive, the government has to conduct auction of spectrum by August 31 this year, following its order for cancellation of 122 licences issued in January 2008. The meeting assumes importance as the government has to adhere to the deadline set up by the apx court for auction of spectrum.

Second, Mukherjee has been nominated as a presidential candidate.

The last meeting of eGoM had decided to auction a minimum of 10 MHz of 2G spectrum, but it put off a decision on the contentious issue of determining the reserve price for spectrum auction. However, based on the Trai data, only 12 of the 22 circles across the country have availability of spectrum of 10 MHz after taking care of the needs of refarming. Key circles where spectrum up to 10 Mhz is not available include the circles of Delhi and Mumbai, Gujarat, Punjab amongst others, which are key mobile circles providing for a large percentage of the subscriber base.