The Telegraph
Monday , November 12 , 2012
Since 1st March, 1999
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Spectrum auction to begin today

Ready to connect

New Delhi, Nov. 11 (PTI): The government will begin tomorrow the auction of telecom spectrum through which it hopes to meet a revenue target of Rs 40,000 crore.

The auction of the air waves, which were freed after the cancellation of 122 telecom licences by the Supreme Court in February, will start at 9am on Monday.

“We have taken quick decisions, firm decisions in the telecom sector the result of which is that we are in the process of an auction. The auction will start on November 12,” telecom minister Kapil Sibal said at an event on Saturday.

Those whose permits were cancelled are Uninor, Loop Telecom, Sistema Shyam, Idea Cellular, including Spice Communications, Videocon, Etisalat DB, formerly Swan Telecom, STel and Tata Teleservices.

Instead of auctioning the entire spectrum freed after the cancellation of licences, the government is auctioning a maximum of 11 blocks of air waves in each circle, except Delhi and Mumbai where there are only eight blocks.

The government has fixed the starting price for spectrum in the auction at Rs 14,000 crore for 5MHz of GSM spectrum on a pan-India level which is around 7 times more than the price of Rs 1,658 crore at which companies were given pan-India permits between 2001 and 2008.

Of the eight companies whose licences were cancelled, only three — Idea Cellular, Videocon and Telenor (majority stakeholder in Uninor) — have submitted bids. These companies will have to win at least 5MHz of spectrum, divided in blocks of 1.25MHz each, to continue their services in areas where their licences were cancelled.

Sistema pact

Russian conglomerate Sistema, which has a joint venture with Shyam Group, has said it will not exit the Indian market as it is hopeful of a positive response on its curative petition from the apex court.

Sistema has a 56.68 per cent stake in Sistema Shyam Teleservices (SSTL), which offers services under the MTS brand. The Supreme Court had cancelled the company’s 21 licences .

“Absolutely we will continue. We are putting all focus and hopes towards the legal route,” SSTL president and CEO Vsevolod Rozanov said.