SSTL interested in buying pan-India CDMA spectrum in auction

Sistema Shyam Teleservices Ltd (SSTL), operating under brand name MTS, plans to expand at pan-India level if the price of CDMA spectrum is fixed based on the methodology used for determining the rate for GSM airwaves.

"Why not? We already have network now. We can launch it in one month. It is very much possible if spectrum price is right," SSTL CEO Dmitry Shukov told PTI in an interview.

He was responding to query if SSTL, which operates only in 9 of 22 service areas, will expand to pan-India level if spectrum price is fixed as demanded by it.

Government is starting auction of two sets of GSM spectrum used by companies like Airtel, Vodafone, Idea Cellular etc. in auction starting February 3.

The Telecom Regulatory Authority of India (TRAI) is working to determine CDMA spectrum base price for auctions after repeated requests from the government.

The regulator had recommended against auctioning these airwaves in September but suggested sale of two sets of GSM airwaves, 1800 Mhz band and 900 Mhz band, at a lower price compared to reserve price fixed in the March 2013 auction. It suggested a pan-India reserve price of Rs 1,496 crore per MHz in the 1800 band, down 37 per cent from the base price set in the previous auction. For the 900 MHz band, the Telecom Regulatory Authority of India (TRAI) recommended a reserve price that was up to 62 per cent lower than the reserve price fixed in March.

SSTL has demanded that regulator use a similar ratio for determining price of CDMA airwaves as was the case for March 2013 auction.

"Last reserve price for 800 Mhz spectrum was only 0.65 times the reserve price for 1800 Mhz band in most circles. It is our belief and expectation that this ratio should be retained," Nr Shukov said.

Besides this, TRAI representatives in open house discussion said CDMA spectrum can fetch more money in auction if firms are given contiguous blocks of airwave frequencies.

Mr Shukov expressed concern over making spectrum blocks contiguous as firms already hold some airwaves and shifting them may lead to issues related to a new compensation policy.

"In case harmonisation campaign is launched before auction, it can take months or even years. Government will lose revenues in form of spectrum usage charge, licence fee, indirect tax and overall fresh investments. I don't understand why only our spectrum is not being put for auction," he said.

The SSTL chief also said his company will support the harmonisation process but auction should be conducted as early as possible.

"The auction for 800 Mhz needs to happen as soon as possible. We will be stuck with 3.75 Mhz while everyone else will race away with extra spectrum. We need additional spectrum to increase our data speed and make data services attractive for our customers," Mr Shukov said.

The government is eyeing a revenue of Rs 40,874.5 crore from spectrum sale this fiscal year (FY14).