The Empowered Group of Ministers on telecom, headed by Finance Minister P Chidambaram, is likely to discuss on Friday the details of the third round of spectrum auction as well as M&A guidelines for the sector.
"All issues related to spectrum auction which includes its views on base price, schedule of the process and even about auction of 800 Mhz (CDMA spectrum) has been placed before EGoM for its decision," a government official said. The government expects to garner over Rs 11,300 crore from the upcoming auction.
The Telecom Regulatory Authority of India (TRAI) had recommended up to 60 per cent cut in the auction reserve price for spectrum in the 900 MHz band in Delhi, Mumbai and Kolkata circles. It had also suggested 37 per cent cut in the reserve price for spectrum in the 1800 MHz band- spectrum that was freed from cancellation of 122 2G licences.
The inter-ministerial panel Telecom Commission has recommended to EGoM that reserve price for pan-India 1800 MHz spectrum be fixed 15 per cent higher than TRAI suggested rates. The same for 900 MHz be fixed 25 per cent higher than what the TRAI had recommended.
The EGoM has to take call on CDMA spectrum which has become a bone of contention between government and TRAI. The EGoM had asked Department of Telecommunications to take recommendation of TRAI on base price of all three set of spectrum band, including CDMA.
Following decision of the EGoM and then by inter ministerial panel Telecom Commission, DoT approached TRAI three times but the regulator did not recommend base price for CDMA spectrum.
Apart from this, the EGoM is likely to firm up its decision on the much-awaited Mergers and Acquisitions (M&A) policy that is expected to pave way for consolidation in the sector with 12 mobile service providers.
Telecom Commission has given its nod to allow telecom companies to merger in a manner that there market share does not exceed 50 per cent in terms of subscribers base. The Cabinet has already announced broad guidelines with respect to M&A Policy.
The EGoM has to take call on spectrum charges that an entity formed after merger will have to pay on its total holding, lock-in period of the merger and a transfer fee on spectrum allocated to a company and gets moved to another entity within period of three years as result of mergers or acquisition.
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