The Indian Government has finalized the reserve price of spectrum, for the upcoming 2G spectrum auction following recommendations from its Empowered Group of Ministers (EGoM) - For GSM: a reserve price of Rs 14,000 crores (around $2.5 billion) has been set for 5 MHz pan India in 1800 MHz Band - For CDMA: a reserve price of Rs 18,200 crore ( around$3.2 billion) in the 800 MHz band, 1.3 times that of 1800 MHz band. The price is lower compared to the TRAI's recommended reserve price of Rs 18,100 crore for 5MHz of spectrum in the 1800 MHz band, and more than Rs 36,000 crore for 800 MHz band. Other decisions - Spectrum Usage Charges: The cabinet has also approved the existing slab rate system for Spectrum Usage Charges (SUC), which ranges between 2-7% of the operator’s annual revenues, depending on the spectrum quality and whether the operator has 3G spectrum in the country. - Defer issues on pricing spectrum for existing providers: However, it has deferred its decision on issues related to pricing of spectrum and on pricing of spectrum held by existing providers, pricing of contracted spectrum, excess spectrum, and prospective or retrospective pricing, citing pending ascertainment of developments/ outcome of the ongoing proceedings before the Supreme Court in the Presidential Reference. What's Next With the reserve price being finalized, the government can decide on a timeline for the 2G auction, as telcos whose licenses were cancelled by the Supreme Court in its verdict, approach the 7th September deadline. However, note that existing…
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