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Telecom tariffs to rise 37 to 49 paise at Rs.1,400 crore reserve
price: COAI
Tuesday August 07, 2012 09:06:25 AM,
IANS
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Related Article |
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Cabinet okays Rs.14,000 crore as spectrum
auction base price
The cabinet
Friday approved Rs.14,000 crore as the reserve price for the 2G
spectrum auction fixed by the Empowered Group of Ministers (EGoM)
on telecom.
The cabinet, at a meeting here, also approved a base price of
Rs.18,200 crore for the CDMA services and spectrum usage charge of
three to eight
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New Delhi: Telecom
tariffs would rise 37 to 49 paise per minute led by the cabinet's
decision to fix the reserve price for the 2G spectrum auction at
Rs.14,000 crore per 5 MHz in the 1,800 MHz band, an industry lobby
for GSM operators said Monday.
The Cellular Operators Association of India (COAI), which is also
examining legal options against the government, said it will
finalise its steps by the end of this week.
"We are examining all the legal options to challenge the policy
decisions of the government and are currently talking to our
lawyers. We will be able to take a decision on that by the end of
this week," COAI director general Rajan Mathews told IANS.
COAI also said this decision would lead to a rise in the industry
debt to anywhere between Rs.3.7 lakh crore and Rs.5.4 lakh crore.
"The cabinet has not given due consideration to the fundamental
issue of unsustainable high reserve prices which will
significantly increase costs, thereby invariably increasing the
tariffs," the industry body said in a statement.
"No mention is made as to how the industry, that is already highly
leveraged and under a debt burden of Rs.2 lakh crore, will fund
the high outflow on account of auction of 2G spectrum, especially
in the wake of the banking sector's unwillingness to take on more
exposure to the industry," it added.
The final reserve price set by the cabinet is lower than the
Rs.18,000 crore suggested by sector regulator TRAI.
According to COAI, the cabinet's decision will severely affect the
sustainability of the sector and further add to the investment
drought that it is witnessing of late.
It also said Inddia's reserve price is way above the international
reserve price per MHz per population.
The reserve price per MHz per population in India (on purchasing
power parity basis) of Rs.19.68 is enormously high as compared to
Rs.1.06 that Ofcom (Britain's telecom regulator) has recently
announced for auction of 1,800 MHz band, it said.
The Supreme Court Feb 2 ordered cancellation of 122 licences
issued during the regime of A. Raja and asked the government to
re-distribute these licences through an auction for which it has
set a Aug 31 deadline.
The Empowered Group of Ministers (EGoM) is scheduled to meet
Tuesday to decide on the auction timeline. It was earlier
scheduled to meet Monday evening.
Though the government has been reiterating that it is making all
efforts to meet the apex court's deadline, industry experts feel
that it is likely to seek another extension.
The Supreme Court had initially given the telecom department four
months to conduct the aution while cancelling the licences in
February but extended the deadline to Aug 31.
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