EGoM to recommend spectrum price, but cabinet to take call

New Delhi, July 20 (IANS) The Empowered Group of Ministers (EGoM) on telecom Friday decided to make specific recommendations on the reserve price for the 2G spectrum auction, spectrum usage charges and mode of payment to the cabinet which will take a final call on all these.

"EGoM has discussed three specific issues -- What should be the reserve price, spectrum usage charges and terms of payment. The EGoM is going to make specific recommendations on each of these issues to the cabinet so that the cabinet decides on it," Communications Minister Kapil Sibal told reporters here after the meeting.

The reconstituted EGoM, headed by Home Minister P. Chidambaram, includes Sibal, Information and Broadcasting Minister Ambika Soni, Defence Minister A.K. Antony, Law Minister Salman Khurshid, and Minister of State in the Prime Minister's Office V. Narayanasamy as members.

On Wednesday the EGoM had deferred a decision on these three crucial issues.

The ministerial panel, however, had approved the roll-out obligations for the operators under which spectrum winners will have to cover 10 percent block headquarters in three years, 20 percent in four years and 30 percent in five years.

Last week, the EGoM had approved "in principle" the proposal to allow telecom firms to mortgage spectrum to raise funds from banks to buy airwaves.

At an earlier meeting, the ministers had heard the sector regulator on the impact of pricing on tariff. The Telecom Regulatory Authority of India (TRAI) has suggested that there should not be more than 10 paise per minute hike in the tariffs.

But telecom operators have been warning of a 100 percent hike in tariffs if the TRAI proposals are accepted.

According to sources, the EGoM has asked DoT to prepare a matrix of various levels of reserve price and spectrum usage charge and the impact that would have on the tariffs for consumers and the revenue accrued to the government.

TRAI had recommended a reserve price of Rs.3,622 crore for 1 Mhz pan-India spectrum, which is around 10 times higher than the price at which 2G licences were allocated in 2008 under then telecom minister A. Raja.

The Supreme Court Feb 2 ordered cancellation of 122 licences issued in 2008 and asked the telecom department to redistribute these through an auction process.