EGoM's decision to defer CDMA spectrum auction may benefit Sistema

Troubled CDMA operator Sistema Shyam Teleservices is likely to benefit from the deferment of decision on the 800 MHz spectrum auction by the Empowered Group of Ministers (EGoM) on telecom.

Sistema Shyam Teleservices is set to lose all its operating permits, except in Rajasthan, in January as a result of a February Supreme Court order cancelling 122 telecom licences for alleged corruption in spectrum allocation. According to a top official of the Department of Telecommunications (DoT), the government would not be able to conduct the auction for the 800 MHz band of spectrum, the band used by the CDMA operators, before January 18, when Sistema would lose operating permits.

This would mean the government may have to give an extension to the Russian operator, according to an industry insider. But for that, Sistema Shyam Teleservices need to appeal before the Supreme Court for an extension, the source added.

Following the cancellation of its licence, the company had filed a curative petition before the Supreme Court seeking restoration of its licences in May. However, it is yet to be listed for hearing.
 

RINGING IN RELIEF

• Sistema Shyam Teleservices is set to lose all its operating permits, except in Rajasthan, in January as a result of a February Supreme Court order cancelling 122 telecom licences for alleged corruption in spectrum allocation
• This would mean the government may have to give an extension to the Russian operator. But for that, Sistema would need to appeal before the Supreme Court for an extension
• The company is likely to benefit from the deferment of a decision on the 800 MHz spectrum auction by the Empowered Group of Ministers on telecom

Earlier this week, Vsevolod Rozanov, president and chief executive officer, Sistema Shyam Teleservices, said that the company is currently working on an “every day, every week basis”.

“There is a Plan A, but no Plan B. We came here on the government’s invitation. We need to understand what is the way out. At this stage, we see there is sympathy that we can continue, we need to see how,” he had said.

Sistema Shyam, which operates under the MTS brand in India, did not participate in the recent auction. But, the company would “very seriously” consider participating in the next auction if the government decides to conduct another auction at the “reasonable” 2008 reserve price, Rozanov said.

The government has already said that it would announce fresh dates for the 800 MHz CDMA spectrum auction, by March 31, 2013. During the November auction, it failed to get bidders for the 800 MHz airwaves due to high reserve price.