2G reserve price: Telcos seek further reduction

Even as the EGoM has decided to reduce the reserve price of spectrum in four circles by 30 percent, the telecom industry continues to seek a further reduction in spectrum reserve prices. CNBC-TV18's Malvika Jain dials in various operators to find out their views on the next round of spectrum auctions.

The decision of the spectrum EGoM to conduct fresh auctions in four telecom circles of Delhi, Mumbai, Karnataka and Rajasthan for 1,800 MHz band spectrum and in Delhi, Mumbai and Kolkata telecom circles for 900 MHz band has received a mixed response. Unlike the previous round, companies are not writing off the next auction already, but they continue to complain about the reserve price. Also read: FDI in telecom sector plunges to $43m in April-Sept FY13 Sanjay Kapoor, chief executive officer of Bharti Airtel says, "I know that industry has a precedence in the past 3G auctions. The lower the prices, you'll have more participation and it is good for competition in this country." With the 30 percent reduction in the reserve price of 1,800 MHz spectrum, the Delhi circle will now cost around Rs 485 crore, Mumbai circle around Rs 475 crore, Karnataka circle Rs 231 crore and Rajasthan circle Rs 47 crore.  The final decision in this matter will be taken by the Cabinet. In the meantime companies, whose licenses have been cancelled by the Supreme Court, are concerned about their fate after January 18, the date until which their telecom licenses are valid. While Sistema, a Russian telecom company, which chose not to bid in the earlier auction round, has fired a fresh salvo at the government seeking an urgent resolution to the issues which it faces with respect to its licenses and spectrum. Telenor, a Norwegian investor, is seeking the government’s aid for protection of its operations in Mumbai, Kolkata and West Bengal circles where it didn't manage to win any spectrum in the first auction round. Sigve Brekke, executive vice president and head, Telenor Asia Operations says, "The road ahead for us is to now understand what the government's plans are for the next auction and this is what we have discussed with the minister today." All eyes are now on the Cabinet. It remains to be seen if the highest executive group will lower spectrum reserve prices further.