DoT or Department of Telecommunications is expected to rule in favor of 800MHz spectrum being priced differently, if SSTL or Sistema Shyam Teleservices Limited has its way. The telecom operator has submitted a petition requesting that the reserve price of 1MHz spectrum in the 800MHz band be fixed at 80% of that of the 1800MHz band.
The price per MHz in the 1800MHz frequency was marked at Rs 2800 crores and the price of the 800MHz band was taken at 1.3 times more, amounting to Rs 3640 crores for 1MHz. This happened in July 2012 and following an unsuccessful auction which witnessed no takers, the rates were reduced to Rs 1820 crores per MHz in the hope that network providers would be encouraged to participate.
In March 2013, SSTL ended up being the only bidder for the CDMA spectrum. It came away armed with the opportunity to execute operations in 8 circles for a price of Rs 3639 crores. The Economic Times notes that SSTL currently does business in 9 service areas including Delhi, Gujarat, Uttar Pradesh (West), Karnataka, Kolkata, West Bengal, Tamil Nadu, Kerala and Rajasthan.
If you crunch the numbers according to the petition submitted by SSTL to DoT, 80% of Rs 2270.40 crores per MHz in the 1800MHz band amounts to Rs 1816.32 crores. TRAI or Telecom Regulatory Authority of India, thinks a base price of Rs 2685 crores for 1MHz in the 800MHz band would be just right and this is almost 50% higher than the previously noted pan-India reserve price.
It’ll be interesting to see how this matter between DoT and SSTL plays out. The former has a lot on its plate at present, with the Telecom Commission meeting scheduled for next week and opinions about 3G spectrum sharing being voiced out loud and clear.