Auction fervour will dampen on higher spectrum prices: COAI

Written By Unknown on Rabu, 06 November 2013 | 23.25

Rajan Mathews, director general, Cellular Operators Association of India (COAI), believes the enthusiasm surrounding the spectrum auction is now likely to dampen.

Speaking to CNBC-TV18 on his views on the reserve prices of 1800 MHz spectrum, fixed 15 percent higher and that for 900 MHZ , fixed 25 percent higher than than what the TRAI had recommended.

"Investors, operators all of us had looked at the TRAI pricing and thought that they were rational and analytical and well put together. So, tinkering with that particular price structure to take it upwards is obviously a bit disappointing to us and perhaps will dampen some of the enthusiasm for the upcoming auctions," he adds.

However, Mathews hails the move of a flat spectrum usage charge and adds that it will help in the economics for the companies.

Below is the edited transcript of Mathews' interview to CNBC-TV18.

Q: Your first reaction and your key takeaways?

A: I am a bit disappointed in terms of the increase in prices. Investors, operators all of us had looked at the TRAI pricing and thought that they were rational and analytical and well put together. So, tinkering with that particular price structure to take it upwards is obviously a bit disappointing to us and perhaps will dampen some of the enthusiasm for the upcoming auctions.

Q: Do you expect operators to participate in the upcoming auction with a 15 percent higher reserve price?

A: There will be participation in the auctions but not at the robust levels that we would have probably expected previously. We haven't seen the details of the pricing but it appears some the prices of some circles have been raised and that is a bit counterintuitive because those are the circles that have a higher penetration.

We will wait to see the details but it will definitely mute the overall sense of enthusiasm that was building up for the auction based on the TRAI pricing.

Q: What we are picking up from DoT sources is that they believe flat spectrum usage charges is a good idea, they will look to refine it in consultation with the finance ministry - your reaction?

A: That is absolutely great news because we had supported a flat spectrum usage charge (SUC) vis-à-vis the 3 percent that the TRAI had recommended. I know that there were some discussions within the DoT on that, so we are glad to see that they have recommended a flat SUC charge that definitely helps in terms of the economics for corporations.



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