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Trai may set spectrum auction price higher than Rs 1658 cr
A crucial issue that is at the heart of the upcoming 2G spectrum auction is the pricing of the spectrum. Trai is set to determine that within the next few days. Going by the initial reactions, it is clear that the base price for the auction may well be set higher than what the industry has called for.
A crucial issue that is at the heart of the upcoming 2G spectrum auction is the pricing of the spectrum. Trai is set to determine that within the next few days. Going by the initial reactions, it is clear that the base price for the auction may well be set higher than what the industry has called for.
Malvika Jain of CNBC-TV18 reports that despite the conflicting suggestions on various aspects, it is clear that the one thing that the entire industry wants to avoid is a repeat of the high priced 3G auction with Rel Comm , Tata Tele , Bharti and Vodafone among others saying this is a clear no go. Telcos believe that the 3G auction model led to artificially higher prices.
While the government earned over Rs 1 lakh crore, the cost of debt has been impacting profitability of telecom companies. However, with the SC directing a 3G-like auction, Trai may have it hands tied.
"We have got to see that the method of auction be such that the real market price is found," says JS Sarma, chairman, Trai.
While the entire industry wants to retain the reserve price at Rs 1658 crore, Trai is set to determine the value of the 2G spectrum afresh.
"We have to take into consideration the affordability factor that you had mentioned but this will be a subject matter of discussion," Sarma says.
Clearly, while auctions are the way to go, it is the cost and the model that will see much debate in the months to come.
