DoT proposes new fee regime for 3G auction reserve price

The Department of Telecom (DoT) has suggested three alternative reserve price levels for the 3G auction. CNBC-TV18's Siddharth Zarabi reports

 

Here is a verbatim transcript of Siddharth Zarabi's comments on CNBC-TV18. Also watch the accompanying video.

 

After the Finance Ministry recommended doubling of the 3G reserve price to Rs 4,040 crore, the DoT has suggested to the CCEA (Cabinet Committee on Economic Affairs), which is likely to meet this Saturday on the 3G policy, that a third alternative - Rs 3,540 crore for every block of 3G licence - can be considered.

 

Now crucially for the WiMax auction, what the DoT has suggested is that the reserve price should be one-half of whatever is the final reserve amount. So in effect, the WiMax auction reserve price could go upto Rs 1,717 crore and another key development that has happened today is that for the first time in the recent weeks, the DoT has actually now finalised its plans to auction 3G spectrum for CDMA services.

 

As we know, GSM and CDMA frequencies for 3G are different and for that they have also suggested a much lower reserve price which, at Rs 3,540 crore, is one-fourth of that, effectively works out to Rs 880 crore. So what is likely to happen in the cabinet meeting is that the cabinet is going to decide on one of these reserve prices and consequently the reserve prices for WiMax as well as for CDMA EVDO will be finalised. The earnest levels will not be changed - no additional annual administration charge is being levied. All other key clauses remain the same. But despite this clearance, if it comes on Thursday, it is clear that there will be a new auction timeline.