EGoM to decide spectrum price for auction

New Delhi: An Empowered Group of Ministers (EGoM) may early next month decide on the base price for auction of telecom spectrum after an inter-ministerial panel presents pros and cons of accepting sectoral regulator Trai`s steep reserve price.

The Telecom Commission (TC), which had earlier this week fixed modalities of the spectrum auction necessitated by the cancellation of 122 2G licences by Supreme Court, deliberated on the base price suggested by Trai. However, it has decided to leave the decision upon Finance Minister Pranab Mukherjee-headed panel.

"The TC took note of reserve price which Trai has recommended and it (TC) felt that an analysis needs to be made and presented to EGoM on the impact of spectrum price on certain parameters that have been worked out," TC Chairman and DoT secretary R Chandrashekhar told reporters here.

He added that analysis would be carried out by Trai keeping in mind that a balance needs to be struck between spectrum price and three other critical factors — revenue to government, tariff to consumer and viability of investment and continued attractiveness of the sector.

The Telecom Regulatory Authority of India has proposed Rs 3,622.18 crore for one megahertz (MHz) as base or minimum price for pan-India spectrum for auction. This suggested price is around 10 times higher than the floor price at which the former Telecom Minister A Raja had allocated spectrum and licences in 2008.

"An analysis needs to be made and presented to the EGoM on the impact of this reserve price…impact of spectrum price on tariff if it is passed on, second if absorbed then impact on investment, viability and return on investment," Chandrashekhar said.