EGoM meet on Thursday to discuss lukewarm response to 2G auction

The empowered group of ministers (EGoM) on telecom will meet on Thursday to discuss the future course of action on the backdrop of the lukewarm response to the recently concluded auction of 2G spectrum.

The EGoM, headed by finance minister P Chidambaram, is likely to discuss the revised reserve price of spectrum for the four circles – Delhi, Mumbai, Karnataka and Rajasthan which did not receive any bidder in the recent auction of 2G spectrum of 1800 MHz band, conducted in the second week of November.

It will also discuss how it could conduct a fresh auction for the CDMA spectrum which also failed to get any bidders in the last attempt. Both Tata Teleservices and Videocon who had initially applied showing interest for the 800 MHz but had withdrawn before the auction started.

The EGoM is also likely to consider reducing the CDMA licence term to 10 years from 20 years at present. After the 10-year term, the CDMA operators would be able to migrate to liberalised spectrum, which is not available at present.

The EGoM might also examine possibilities of extending the 900 MHz band by allocating a portion of the CDMA band. The extended GSM band would start from 850 MHz, and could be more efficiently used by GSM operators for 3G, 4G and LTE services.

In tomorrow’s meeting, the Chidambaram-led minister group would also examine possible options of how they should compensate the telcos, including S-Tel and Etisalat, which did not bid for spectrum in the recent auction.

The EGoM will also discuss how it should go ahead with the planned phase-III auction of airwaves for FM radios.

The government had managed to raise just Rs 9,407.6 crore or 27.4 per cent of the total reserve price in the last auction of 2G spectrum. All the 18 circles that received bids, other than Bihar, UP (East), UP (West) and Gujarat circles, had lower demand than supply. The four circles – Delhi, Mumbai, Karnataka and Rajasthan that did not receive any bids account for 51 per cent of the reserve price.

After the last auction, telecom minister Kapil Sibal had said that the government would conduct a fresh auction for the unsold circles and CDMA spectrum with a revised pricing before March 31, 2013.

The government had targeted to mop up about Rs 30,000 crore from the 2G spectrum auction that concluded on November 14.