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Cabinet seal on spectrum price rejig

Taking a call

New Delhi, Dec. 9: The cabinet today approved the decision of the group of ministers (GoM) on spectrum pricing earlier last month.

The GoM had ruled that the Telecom Regulatory Authority of India’s sharp cuts in the price of airwaves in the 1800MHz and 900MHz bands would need to be tempered and threw its weight behind the Telecom Commission, which had recommended moderate cuts in reserve prices set for last year’s and early this year’s failed auctions.

According to sources, the government hopes to earn up to Rs 40,000 crore through the sale of radio waves and fees this year even though the auction of spectrum in the 800MHz band might be delayed.

Trai had recommended up to a 60 per cent reduction in the reserve price of 900MHz spectrum in Delhi, Mumbai and Calcutta circles. It had also suggested a 37 per cent cut in reserve price in the 1800MHz band spectrum that was freed following the cancellation of 122 2G licences by the Supreme Court last year.

The Telecom Commission, however, wanted to increase the reserve price by 15 per cent in the 1800MHz band and by 25 per cent in the 900MHz band over the rates suggested by Trai.

Officials said the new base price per megahertz in the 1800MHz band would work out to Rs 218.90 crore in Delhi Rs 206.74 crore in Mumbai and Rs 73.13 crore in Calcutta, which is 25 per cent higher than the base price recommended by Trai. The regulator had recommended Rs 175.12 crore for Delhi, Rs 165.39 crore for Mumbai and Rs 58.50 crore for Calcutta.

For the 900MHz band, the base price per megahertz will be Rs 360 crore for Delhi, Rs 328 crore for Mumbai and Rs 125 crore for Calcutta. Trai had recommended Rs 287.72 crore for Delhi, Rs 262 crore for Mumbai and Rs 100.22 crore for Calcutta.

Sibal said the GoM was yet to take a decision on merger and acquisition rules in the telecom sector and indicated that the issue would be taken up later.

Pact with UAE

The government today approved a bilateral investment protection treaty between India and the UAE.

“India-UAE Bilateral Investment Protection Agreement (Bipa) has been approved by the cabinet,” sources said.

The decision comes within weeks of the Centre clearing the Jet-Etihad Airways deal.

Under the agreement, UAE-based Etihad will invest about $379 million to pick up 24 per cent in the local carrier.

The UAE-based airlines wanted India to sign Bipa before executing the deal to avert the crisis witnessed in case of Etisalat’s telecom investment.

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