The Telegraph
Thursday , January 16 , 2014
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Top eight in queue for spectrum

New Delhi, Jan. 15: Vodafone and Airtel are among the eight telecom operators that applied to bid for spectrum, encouraged by the government’s assurance to resolve the issue of spectrum use charge.

The government is expecting to garner at least Rs 11,300 crore from the spectrum auction scheduled to be held on February 3. About 403 megahertz of 2G spectrum in the 1800MHz band and 46MHz of spectrum in the premium 900 MHz band is being auctioned.

Telenor, Reliance Communications, Reliance Jio, Idea, Aircel and Tata Teleservices are the other bidders. Today was the last date for the submission of applications, and the operators have the option to withdraw by January 27.

Mukesh Ambani Group firm Reliance Jio is a surprise entrant as it is gearing up to launch 4G wireless broadband services.

The government, however, needs to resolve the row over spectrum use charge. “Everyone is waiting for clarity on SUC. We can take a call only when clarity is there,” Bharti Group deputy managing director Akhil Gupta said.

Officials said the issue was likely to be resolved next week. “All will be resolved before auction,” telecom secretary M.F. Farooqui said on the sidelines of a telecom event.

Analysts maintain that the auction will prove to be lucrative for the government once issues concerning the fee and mergers are settled.

Operators are likely to buy back their current spectrum, besides top-up of contiguous slots in the bands of their choice.

Current charges for spectrum use are calculated on the basis of slabs. The charges for slabs range from 3-8 per cent of all revenues.

The Telecom Regulatory Authority of India felt the differential spectrum charge was “a disincentive for any merger” and had proposed a flat 3 per cent of an operator’s annual revenue as fee for airwaves obtained in auctions and 5 per cent for radio waves given under the earlier rules of subscriber-linked allocation.

Officials have also proposed a 1 per cent spectrum fee for 4G spectrum, which may be auctioned later.

Meanwhile, Sistema Shyam Teleservices, which operates under MTS brand, today shot off a letter protesting Trai’s bid to restrict its participation in the auction of 800MHz spectrum.

The company also opposed Trai’s move to reduce the reserve price of 1800MHz airwaves without considering similar reductions in the 800MHz band.