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| Govt ups ante, says telcos will have to shell out 2G base price |
| Monday, 18 June 2012 | |
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The government has hardened its position with mobile operators who are pushing it to lower the high reserve price of Rs 18,110 crore for pan-India spectrum in the forthcoming auctions. Sensing that operators may unite and ensure that no bids come, thus making the auctions a failure, the government has told them that even in that case the incumbent operators would have to pay the reserve price as renewal charges for the spectrum they hold. This has driven a wedge between dual-technology operators like Reliance Communications and Tata Teleservices (TTSL), and GSM operators like Bharti Airtel, Vodafone and Idea Cellular. The divide has appeared with the department of telecommunications (DoT) informally trying to convince the operators to accept its proposal that for a level playing field all of them agree to pay the auction price as renewal charges for the spectrum they hold for the balance period of the validity of their license reported the Financial Express. While AUSPI, the industry association of dual-technology operators, is opposed to this proposal, the GSM operators' body COAI has so far not taken an official position. The dual-technology operators allege that the DoT proposal is loaded in favor of the incumbent GSM operators as eight of Bharti's, 10 of Vodafone’s and nine of Idea's licenses are due for renewal between 2014 and 2016. As such, the impact on these operators would be only for 14, 13 and 6 licenses, respectively. They feel that if the empowered group of ministers (EGoM) lowers the reserve price and the DoT's proposal is approved by the Cabinet, the three operators would pay up the amount and get all their licenses renewed for the next 20 years. However, RCom and TTSL would get badly hit because their CDMA licenses have a validity for another 10 years and dual technology ones for another 16 years. The payout by these two operators would, therefore, be much more than for the GSM players. AUSPI as well as TTSL's managing director N Srinath have stated that in case DoT goes ahead with this proposal, they would have no option but to move court. The EGoM is expected to meet later this week to take a decision on the reserve price. Based on its outcome, DoT may take a final view on its proposal on which the Cabinet note has been circulated to other relevant ministries for their views. –Communications Today Bureau |
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