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| Ray of hope for telecom firms on base price revision |
| Tuesday, 12 June 2012 | |
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The empowered group of ministers (EGoM) has quietly modified the key objective of the auction. The text of the objective has been tweaked from revenue maximization to maximizing revenue but within set parameters determined by the government. These parameters, which will now be added, include affordability, increasing telecom density, and accessibility. The move of the EGoM, headed by Finance Minister Pranab Mukherjee, is the first indication that the government has shifted its objective from that specified earlier — at the time of 3G and BWA spectrum auctions some years ago — when it was based on maximization of revenue. The Telecom Commission had recently endorsed the objectives for 3G and BWA auction as those for the 2G auction as well, reported Business Standard. A second meeting of the EGoM, where the base price of spectrum for the auction will be finalized, is slated after June 20. The EGoM has taken the first step of moving away from the earlier stance of revenue maximization with its decision to make available to the operators in the auction double the quantity of spectrum recommended by TRAI. It decided to auction a minimum of 10 MHz of spectrum, compared to TRAI’s recommendation of a minimum of five MHz. The government’s decision of revenue maximization during the 3G auctions had come under severe criticism, as operators had to pay Rs 68,000 crore for each tranche of five MHz of spectrum. As a result, most operators were not able to acquire pan-Indian 3G spectrum network and had publicly said the bidding process did not consider the affordability factor. –Communications Today Bureau |
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