Spectrum auction by Dec-end, at lower base prices: Sibal

Trai has recommended up to 62% reduction in base price of premium 2G spectrum

The next round of spectrum auction is expected by the end of this year with lower reserve prices compared to the ones fixed by the government in the previous round, Telecom Minister Kapil Sibal said today.

"Next set of auctions which are going to take place, we are looking by end of December, hopefully. What will be set for floor price on which telecom operators will bid will be, I think, relatively lower for them to make competitive bids," Sibal in a video message on the occasion of re-branding of GSM industry body COAI.

He said the matter will be decided by inter-ministerial panel Telecom Commission. The ministry will then send its views to the Empowered Group of Ministers, which will forward its recommendations to the Cabinet for the final decision.

Meanwhile, a separate Inter-Ministerial Committee formed for overseeing auction modalities has tentatively set January 7-8, 2014 to start the auctions.

Telecom Regulatory Authority of India has recommended up to 62% reduction in base price of premium 2G spectrum and up to 37% in case of radiowaves freed from the cancellation of 122 licences, compared to the amount fixed for previous auction.

The Telecom Commission has sought clarity on explanations given by Trai to lower reserve price and the next meeting of the Commission is scheduled for October 29.

The Cellular Operators Association of India still finds the spectrum base price to be high compared to the rates in other part of the world.

"India has become a case of limited spectrum quantum availability and high reserve price per MHz of spectrum," COAI Chairman and Idea Cellular's Managing Director Himanshu Kapania said.

"We would be happy to see rationalisation in pricing of the spectrum to be in line with the Indian consumers' ability to pay for these services and attract serious investors to invest in the business," he added.

He said that based on the April-June quarter revenues, the Indian mobile industry has grown to an estimated Rs 1,60,000 core or $27 billion.

"But the nation remains a global pygmy in revenue terms - a meager 2.3% of estimated the global telecom revenue of $1.16 trillion. This is because Indian operators have sacrificed short term gains...By offering among the lowest global tariffs." Kapania added.

He said the Internet penetration in India is still at an abysmal low level of just 4.9%, against China's 17.2 pc, Singapore's 123.3 pc, Japan's 113.1 pc, and the US' 74.7 pc, according to an ITU report in 2012.

"Clearly, a lot of ground has been covered, but plenty more needs to be done," Kapania said.