India’s Union Cabinet has cleared reserve prices for spectrum to be auctioned in the 1,800 MHZ and 900 MHz bands.
The reserve price for pan-India 1,800 MHz spectrum is Rs17.65bn (US$289.27m) per MHz.
This is higher than the price recommended by the…
India’s Union Cabinet has cleared reserve prices for spectrum to be auctioned in the 1,800 MHZ and 900 MHz bands.
The reserve price for pan-India 1,800 MHz spectrum is Rs17.65bn (US$289.27m) per MHz.
This is higher than the price recommended by the Telecom Regulatory Authority of India but lower than the one proposed by the telecoms ministry, local reports indicate.
The reserve price for 900MHz spectrum has been set at Rs3.6bn (US$59m) for the Delhi area, Rs3.28bn (US$54m) for Mumbai and Rs1.25bn (US$20.5m) for Kolkata.
A notice inviting applications for the auction is expected within about a fortnight and the auction itself is set to begin in late January. India is reportedly hoping to raise about Rs480bn (US$7.9bn) from the auction.
The cabinet has also approved new guidelines on M&A deals, which could lead to greater consolidation within the telecoms sector. Specifically, a merged entity will be allowed to have up to 50% market share in any service area, as opposed to 35% at the moment.
However, under the new guidelines, acquirers will also be required to pay the government the difference between the entry fee and the current price of spectrum bought in the context of a merger. This rule will only apply in cases where spectrum was originally acquired outside of an auction.
India’s last two spectrum auctions – in November 2012 and March this year – failed to generate much interest from operators, which complained prices were too high. The sole bidder in the March auction was Sistema Shyam TeleServices (MTS), which won spectrum in the 800 MHz band.
