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BW Businessworld

New Govt To Decide CDMA Auction Price

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After the auction of the 900MHz band spectrum early this year, the big thing that telecom service providers are looking for from the new government relates to the base price for the auction of 800MHz band spectrum. That could be a critical call to take. It is on this band that at least three operators — Sistema Shyam TeleServices (Sistema), Reliance Communications (RCOM) and Tata Teleservices (TTSL) — offer CDMA-based mobile services.
Earlier in the year, the Telecom Regulatory Authority of India (Trai) had recommended an auction base price of Rs 2,685 crore per MHz of 800MHz band spectrum. However, that has been opposed by Sistema which has termed the price as too high. Either Trai will have to come up with a lower price or the new group of ministers will have to look at it closely.
The problems do not end here. The spectrum that operators have is also limited. RCOM has 5MHz in 12 circles, 3.75MHz in another six and 2.5MHz in the rest. Sistema has three carriers (3.75MHz) in eight of the nine circles and 5MHz in Rajasthan. TTSL has only 2.5 MHz across the country. As if that was not enough, the government is considering a proposal to introduce eGSM. That essentially means that the top end of the 800MHz band will be used for GSM services like in Europe. It will in turn mean that spectrum available for CDMA services will get reduced. That has yet to be cleared by the government.
That has happened because over the years, there has been a gradual erosion in the CDMA subscriber base. Today, CDMA subscribers account for just 7 per cent of the total subscriber base.
Now, the Department of Telecommunications (DoT) is planning to fix a different price for contiguous and non-contiguous spectrum in the 800 MHz band. It is believed that DoT has sought Trai’s suggestion on pricing of non-contiguous and continuous spectrum.
Therefore, there is quite a bit of work to be done before the CDMA auctions take place.