Expect better response in January 2G spectrum auction: COAI

Written By Unknown on Senin, 09 Desember 2013 | 23.08

The Cabinet Committee on Economic Affairs (CCEA) on Monday approved the reserve price of spectrum for the upcoming 2G auctions. The new price is significantly lower than the previous round of auctions held in November and March this year. Rajan Matthews of COAI (Cellular Operators Association of India) spoke to CNBC-TV18 regarding the move and its impact on the upcoming auctions.

Also Read: CCEA finalises spectrum price for 900 & 1800 mhz

Below is the verbatim transcript of Rajan Matthews' interview

Q: The CCEA toeing the empowered group of ministers (EGoMs) line agreeing with the spectrum pricing that had been decided by the EGoMs. The industry wanted a lower reserve price. How do you react? What will be the impact of all this on upcoming auctions?

A: We are pleased that the process of atleast going ahead with the auctions is progressing. The cost to the exchequer on just sitting on unused spectrum is large several thousand crore rupees. So, we are glad that that process is going to go ahead as a result of this decision. However, we have been consistently saying that the response to the auction might be a bit dampened due to higher reserve prices that have been adopted by the EGoM and the Cabinet.

We have said that the prices recommended by Telecom Regulatory Authority of India (TRAI) were closer to what should be the reserve price. Also, there continues to be misunderstanding between the reserve price and the market price.

The auction is intended to determine the market price. The reserve price is a reasonable price intended to encourage bidding and value.

Q: Just a few days back we also saw the adoption of the new M&A guidelines. Today's decision taken by the CCEA and the M&A guidelines being adopted, if you were to play them together, will there be any impact on the 2014 auctions?

A: It is certainly in the right direction. The M&A guidelines are helpful. The details are not yet known completely, that will have to come out in the NIA documents which will be out next week or two and that will be more specific in terms of specifying what will be required of bidders. The industry is waiting for that document and it will give us a clearer picture of what to expect in the upcoming auctions.

Q: Last time auctions were a dam squib. Do you expect atleast better players coming out, actually participating in the coming auction in January?

A: We do expect better response. There will be bidders for the 1800 Mhz, 900 Mhz spectrum. The major operators are put in a difficult position because the 900 Mhz spectrum that offers services to several million customers over 200 million customers is something that they would not like to lose. So, there is an imperative for them to participate which itself will indicate that it will have bidders. How much will be the critical thing, we will have to watch for.



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