 "Govt to get around Rs 3,639 crore from CDMA spectrum auction")
The Government will get Rs 3,639 crore from the auction of 800 MHz CDMA spectrum that concluded today.
Sistema Shyam Teleservices (SSTL), the lone bidder in the 800 MHz spectrum band today, has bid for only eight circles. But, the company had submitted application for 11 telecom circles before the auction.
“It is clear that a business decision has been taken by the company based on which circles they wish to continue in...based on their analysis and considerations,” said R. Chandhrashekhar, secretary, Department of Telecommunications (DoT), after the conclusion of auction.
SSTL has not bid for Mumbai, Maharashtra and Uttar Pradesh (East) which accounts for 35.28% of the base price of the 11 telecom circles that the company had intended to bid. The reserve price of Mumbai circle alone is about 23.52% of the reserve price of the 11 circles. These three circles accounts for about 13% of the company’s total subscriber base of 12.1 million at present.
SSTL has won by 3.75 MHz of spectrum in Delhi, Kolkata, Gujarat, Karnataka, Tamil Nadu, Kerala, Uttar Pradesh (West) & West Bengal in the auction that ended today.
However, the company will not have to pay anything this year, as the Government has assured the company that charges for the spectrum won from the auction will be adjusted with Rs 1,626 crore of licence fee that SSTL had paid in 2008 for the licences that were quashed by the Supreme Court order that cancelled 122 operating permits in February 2012.
As the entire amount will be adjusted with the first instalment, SSTL will have to pay Rs 2,013 crore in 10 equated instalments starting March 2016. So, the company will have to pay Rs 201.30 crore every year starting 2016.
“Given the range of variables we have considered and the spectrum cost for 800 MHz, it was a big challenge to arrive at a core list of 8 circles and to bid accordingly. With Rajasthan circle also a part of MTS India’s footprint, we would be able to service 40% of country’s population, address over 60% of data business potential, safeguard 75% of our current revenues and significantly optimize our losses. Our go forward plan includes building an even stronger MTS brand in the country by focusing on our data centric-voice enabled strategy,” said SSTL president & CEO Vsevolod Rozanov in a statement. SSTL has already closed operations in 10 circles.
The company has also said that about 15% of its 2,850 employees are in the three circles it did not bid today. “Full efforts are being made to absorb maximum number of employees in other circles. In-addition, care is being taken to place some of the employees in other Companies. The Company will also be closely working with all its local partners to address their concerns,” SSTL said in a statement.
Meanwhile, Chandrashekhar also said that the Government will go to the Supreme Court soon regarding auction of the unsold 1800 MHz spectrum that did not get any bidder this time.
Sistema Shyam Teleservices (SSTL), the lone bidder in the 800 MHz spectrum band today, has bid for only eight circles. But, the company had submitted application for 11 telecom circles before the auction.
“It is clear that a business decision has been taken by the company based on which circles they wish to continue in...based on their analysis and considerations,” said R. Chandhrashekhar, secretary, Department of Telecommunications (DoT), after the conclusion of auction.
SSTL has not bid for Mumbai, Maharashtra and Uttar Pradesh (East) which accounts for 35.28% of the base price of the 11 telecom circles that the company had intended to bid. The reserve price of Mumbai circle alone is about 23.52% of the reserve price of the 11 circles. These three circles accounts for about 13% of the company’s total subscriber base of 12.1 million at present.
SSTL has won by 3.75 MHz of spectrum in Delhi, Kolkata, Gujarat, Karnataka, Tamil Nadu, Kerala, Uttar Pradesh (West) & West Bengal in the auction that ended today.
However, the company will not have to pay anything this year, as the Government has assured the company that charges for the spectrum won from the auction will be adjusted with Rs 1,626 crore of licence fee that SSTL had paid in 2008 for the licences that were quashed by the Supreme Court order that cancelled 122 operating permits in February 2012.
As the entire amount will be adjusted with the first instalment, SSTL will have to pay Rs 2,013 crore in 10 equated instalments starting March 2016. So, the company will have to pay Rs 201.30 crore every year starting 2016.
“Given the range of variables we have considered and the spectrum cost for 800 MHz, it was a big challenge to arrive at a core list of 8 circles and to bid accordingly. With Rajasthan circle also a part of MTS India’s footprint, we would be able to service 40% of country’s population, address over 60% of data business potential, safeguard 75% of our current revenues and significantly optimize our losses. Our go forward plan includes building an even stronger MTS brand in the country by focusing on our data centric-voice enabled strategy,” said SSTL president & CEO Vsevolod Rozanov in a statement. SSTL has already closed operations in 10 circles.
The company has also said that about 15% of its 2,850 employees are in the three circles it did not bid today. “Full efforts are being made to absorb maximum number of employees in other circles. In-addition, care is being taken to place some of the employees in other Companies. The Company will also be closely working with all its local partners to address their concerns,” SSTL said in a statement.
Meanwhile, Chandrashekhar also said that the Government will go to the Supreme Court soon regarding auction of the unsold 1800 MHz spectrum that did not get any bidder this time.