To draw investors, TRAI cuts spectrum auction reserve price 80%, Bharti Airtel, Idea Cellular to benefit

Sep 10 2013, 08:59 IST
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The govt is under pressure to lower auction reserve prices of mobile phone airwaves, after most carriers stayed away from bidding in the last two auctions. The govt is under pressure to lower auction reserve prices of mobile phone airwaves, after most carriers stayed away from bidding in the last two auctions.
SummaryBharti, Idea, Vodafone stand to gain the most, while RCom and Tata Tele too will not be harmed.

to Rs 262 crore per MHz from the Rs 1,404.28 crore recommended under former Trai chairman J S Sarma.

The new set of recommendations assume that a lower price allied with liberal usage of spectrum would encourage companies to bid aggressively, and thus produce better returns for the government. Accordingly, Khullar has cut the spectrum usage charge to 3 per cent from the 8 per cent levied currently.

The new recommendations have to be approved by the Telecom Commission. “We are only recommending a reserve price and it is not the final price. Let a market determined price come through the auctions and then we will decide what to do,” Khullar said.

The government needs to conduct the third round of spectrum auction for 1,800 Mhz to comply with the Supreme Court order of February 2012 in the 2G spectrum allocation case.

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