Saturday 21 July 2012

2G reserve price: EGoM recommends minimum price for airwaves be cut to 14,000-16,000 crore

The Empowered Group of Ministers (EGoM) headed by home minister P Chidambaram on 20 July 2012 recommended that the minimum price for airwaves be cut to Rs 14,000-16,000 crore. 
The panel also decided to allow telcos to stagger their payments for spectrum bagged through the bidding process. This was much against the expectation of mobile phone companies who were pitching for an 80% reduction from Rs 18 000 crore proposed by TRAI. 

The panel's recommendations will be sent to the Cabinet for approval. 
Deferred payment had been a key demand by mobile phone companies like Norway's Telenor and Russia's Sistema to take part in the airwaves sale, and these telcos had argued they had no funds to pay upfront for spectrum since banks were unwilling to fund airwaves cost. 
According to reports the panel's recommendations are largely in line with TRAI's proposal that winners pay only 33% of the bid amount upfront, followed by a two-year moratorium, with the remaining money to be paid in 10 equal installments annually. 
The panel had earlier decided to allow mobile phone companies to mortgage airwaves, allowing telcos to use spectrum as collateral and raise funds from banks for the upcoming auctions, a demand made by many serious bidders whose becauses were cancelled by the Supreme Court and wished to regain their permits. 
Operators are still awaiting clarity on the reserve price," said an executive with a Delhi-based telecom company. 
The industry association representing GSM telcos said the proposed cut in the base price was in the right direction and urged the government to reduce it further to about Rs 5,000 crore.

Source:
http://cablequest.org/news/telecom-news/item/987-2g-reserve-price-egom-recommends-minimum-price-for-airwaves-be-cut-to-14000-16000-crore.htmlSource: http://cablequest.org/news/telecom-news/item/987-2g-reserve-price-egom-recommends-minimum-price-for-airwaves-be-cut-to-14000-16000-crore.html

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