India investments depend upon spectrum price: Sistema JSFC CEO

Russia's Sistema JSFC, which controls Sistema Shyam Teleservices, will draw its investment roadmap in India based on CDMA spectrum base price for auction as it finds rates "almost prohibitively high" for making return on telecom investments, a top official said today.
"As far as investments are concerned, it will be too early to tell. It will depend on the spectrum price," Sistema JSFC President and CEO Mikhail Shamolin told reporters on sidelines of Indo-Russian Youth Innovation Summit.
Sistema is largest private Russian company to invest in India. In telecom sector, the company has invested about USD 3.5 billion till date.

"First, it is important to understand how telecom policy will be changing going in future. What is going to happen with spectrum availability. CDMA spectrum prices are extremely high and almost prohibitively high for making return on telecom investment. We will be in deep discussion because of that," Shamolin said.
SSTL, which operates under MTS brand name, has also expressed disappointment on CDMA spectrum base price of Rs 3,646 crore per megahertz for auction recommended by inter-ministerial Telecom Commission.
SSTL has said that at this price government may not find any taker for CDMA spectrum in upcoming auction as at similar price auction have already failed in November 2012.

The next round of spectrum auction across three bands -- 800 Mhz (CDMA), 900 Mhz and 1800 Mhz (both used for GSM services) -- is proposed to be held in February from which government expects to garner minimum of Rs 9,533 crore.

The CDMA base price at Rs 3,646 crore is more than base price fixed by government for November 2012 auction.
Government fixed price of 1.25 Mhz spectrum in CDMA (800 Mhz) band at Rs 4,550 crore for November 2012 auction. At this price, cost of 1 Mhz spectrum comes to Rs 3,640 crore.
The November 2012 saw muted response from the industry as they complained of high base price. There was no bidder for the CDMA spectrum in that auction.

Government later reduced the base price for GSM spectrum by 30 per cent and CDMA spectrum by 50 per cent. There were no takers for GSM spectrum in 1800 Mhz and 900 Mhz band in March 2013 auctions. SSTL, however, turned up to bid for CDMA spectrum in that auction.