An internal committee of the Department of Telecom has given three options for pricing CDMA spectrum if the Government decides to auction it. The reserve price, ranging between Rs 2,231 crore and Rs 3,544 crore for 1.25 MHz pan-India spectrum in the 800 MHz band, will be presented to the Empowered Group of Ministers scheduled to meet on Friday.
Two of the three price options are lower than the base price proposed for 900 MHz band — a frequency band used by rival GSM players.
The panel’s proposal comes even as the telecom regulator declined to give its recommendations on pricing CDMA spectrum. The TRAI is not in favour of auctioning this frequency band and wants this to be converted into GSM spectrum.
The regulator had said that the prices of 800 MHz and 900 MHz bands have similar propagation characteristics in terms of coverage and, therefore, 800 MHz band should not be sold at a far lower price than its true value. But as there are not too many takers for CDMA technology, this band would be sold cheaply if auctioned, it had said.
However, the Telecom Commission overruled the telecom regulator on grounds that keeping spectrum in the 800 MHz band unsold would result in foregone revenues for the Government.
Backing the Commission’s decision, the DoT panel said any comparison of 800 MHz and 900 MHz prices appears to be inappropriate because the TRAI proposal to convert the 800 MHz band into GSM spectrum was not feasible. The panel’s views, if accepted by the EGoM , will cheer CDMA players, including Sistema Shyam and Reliance Communication.
For the 1800 MHz band, the panel has lowered the price from the earlier proposed Rs 2,203 per MHz to Rs 2,107 crore. However, this may not have any implications because the Telecom Commission, the highest decision-making body in DoT, has already recommended pegging the price at Rs 1,765 crore.