EGoM readies a Sistema solution
The empowered group of ministers (EGoM) on spectrum pricing on Monday virtually resolved the Sistema issue by recommending up to 50% reduction in the base price of the CDMA spectrum in the 800 MHz which did not see any participation in the auctions held in November 2012. If the Cabinet accepts the EGoMís suggestion of a 50% cut (the other option is of a 30% cut), then Sistema Shyam will have to pay around R2,900 crore after adjustment for 2.5 MHz spectrum as against around R1,600 crore it paid in 2008.
The government has been in a fix over the cancellation of Sistemaís licences by the Supreme Court since the Russian government, which holds a stake in the company, has demanded that its investments be protected. Sistema did not join the November auctions calling the price too high. It has also filed a curative petition in the Supreme Court which may come up for hearing on January 10.
The base price of CDMA spectrum was 1.3 times that of GSM spectrum in the 1,800 MHz band.
The pan-India base price of GSM spectrum was R14,000 crore; so at 1.3 times, it was set at R18,200 crore. A 50% reduction means a fall to R9,100 crore for 5 MHz of pan-India spectrum.
Sistema currently has 2.5 MHz spectrum, which is sufficient to run CDMA networks and for this quantum, it would need to pay Rs 4,550
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