Telecom Commission raises spectrum price, gives nod for M&A

The Telecom Commission in its meeting today finalized spectrum price for 1800 MHz and 900 MHz and has also given a go ahead for mergers and acquisitions (M&A).

The Telecom Commission has also finally given a go ahead to 800 MHz spectrum auction giving a sigh of relief to CDMA operators in the country.

Reacting to Telecom Commission recommendations Sistema Shyam TeleServices (SSTL) spokesperson said, “SSTL welcomes the decision of the Telecom Commission to auction the 800 MHz spectrum band.”

The Telecom Commission has also given its go ahead for M&A. The merged entity may hold up to 50 percent market share in each circle. Once the cabinet gives a go ahead, the Indian mobile market will see a lot of consolidation and the number of players will reduce significantly. But operators has to still wait for the M&A Policy which is planned to be released in November. All this will help in providing lot of clarity on M&A which will help operators to plan their strategy accordingly.

The Telecom Commission has also finalized reserve price for 1800 MHz and 900 MHz. The new reserve price for 1800 MHz is 15 percent higher whereas reserve price for 900 MHz is 25 percent higher than what TRAI has recommended.

Telecom Commission has raised reserve price for 1800 MHz spectrum for 8 circles including Delhi, Kolkata and Mumbai whereas it has accepted TRAI recommendations for reserve price for 14 circles. The new incremental price will be acceptable to all operators as it is lower vis-a-vis last spectrum auction. And we expect the spectrum auction in 2014 to be successful at the reduced reserve price for both 900 MHz and 1800 MHz.

Now with Telecom Commission giving its go ahead for 800 MHz, the ball is back in TRAI court to finalize the reserve price for 800 MHz. This might delay the spectrum auction process by few weeks. But as things stands, it is a win-win for everybody.

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