India May Raise 3G Spectrum Reserve Price
India's Department of Telecom (DoT) and the Telecom Commission is pushing to raise the reserve price for the forthcoming 3G auction in the country - based on the high price paid in the recent spectrum auction in the USA. The Economic Times newspaper, citing unnamed source reports that people within the Telecom Commission feels that the Rs 1,035 crore ($250 million) reserve price for 5 MHz of 3G spectrum for a pan-India operation is too low.
The auction is expected to start in the next few weeks.
Sources told the newspaper that the Telecom Commission was yet to take a final call on whether the base price would be revised though.
“The just concluded Auction 73 by the FCC in the US tends to suggest that a proposed reserve price of Rs 1,035 crore for 5 MHz of 3G spectrum is way too low. Even DoT, in its draft guidelines of the upcoming 3G spectrum auction, has conceded that the recommended reserve price is on the lower side and may be reviewed,” said a senior government official.
An internal notice within the Department of Telecom has also noted that "in a circle with seven operators keen to bid for 3G spectrum blocks in the 2.1 GHz band, the reserve price ought to be, at least, Rs 100 crore per 5 MHz block of spectrum.” If Rs 100 crore were to be taken as the base price in all 22 circles, the reserve price will be Rs 2,200 crore and not Rs 1,035 crore as currently recommended.
The auction could also be further delayed as the DoT is understood to still be drafting the legal framework for the auction to try and avoid the legal battles which have dogged the issue so far.
On the web: Economic Times
Posted to the site on 10th April 2008