Cabinet green lights spectrum fees, M&A norms

10 Dec 2013

The Indian government has approved auction prices for spectrum in the 900MHz and 1800MHz bands, and has accepted new norms for mergers and acquisitions in the sector, the Economic Times writes. The Cabinet Committee on Economic Affairs (CCEA) gave the final approval for the frequency sale, following green lights from the empowered group of ministers (EGoM) and the Telecom Commission. The CCEA accepted the pricing plan suggested by the Commission, which set the base price per-MHz for pan-India spectrum at INR17.63 billion (USD289.36 million) for 1800MHz frequencies, whilst prices for 900MHz airwaves in Delhi, Mumbai and Kolkata were set at INR3.59 billion, INR3.27 billion and INR1.25 billion respectively. The Commission’s recommendations struck a balance between proposals from the Telecoms Regulatory Authority of India (TRAI) and the Department of Telecommunications (DoT), the first of which was deemed to have lowered prices too far whilst the latter had kept costs too high. The auction is due to begin on 21 January 2014.

The CCEA has also approved changes to merger and acquisitions norms that will lift the maximum combined market share of a merged entity in a circle to 50% from its current 35%. Further, the merged company will be required to pay market rates for holding spectrum above 4.4MHz (or 2.5MHz for CDMA operators) that was allotted against an entry fee. If the spectrum was purchased via auction, however, the enlarged company will not be required to pay additional fees for their frequencies.

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