SSTL hopes for lower base price of 800 MHz airwaves

NEW DELHI: Telecom operator Sistema Shyam Teleservices, which operates under the MTS brand, has said that it hopes the new BJPled government will stipulate a lower starting price of 800 MHz airwaves than that proposed by the sector regulator and warned that not doing so could result in an unsuccessful auction for this spectrum just as a year ago.

"The spectrum (800 MHz base) price should be lower, and then the market forces should determine the final price," chief executive Dmitry Shukov told the media on Wednesday after announcing the telecom operator’s first quarter results. The 800 MHz bandwidth is typically used by the CDMA operators in India. In February, the Telecom Regulatory Authority of India (Trai) had suggested a base price of Rs 2,685 crore for a megahertz (MHz) of all-India CDMA airwaves.

Pure-play CDMA operators such as Sistema Shyam Teleservices ( SSTL), the Indian unit of Russia’s Sistema JSFC, had then opposed the recommendation since the suggested price was higher than the Rs 1,765 crore per MHz for 1800 MHz used for 2G spectrum.

The sector regulator, on its part, justified the higher pricing of efficient CDMA spectrum on the grounds that it could be used in future for providing high-end data and 4G services. SSTL has instead suggested that the reserve price be fixed lower at 80% of the price of 1800 MHz band airwaves discovered in the February auction.

The company is also open to exploring participation in the next auction of 1800 MHz spectrum – typically used by GSM operators – with an eye on offering 4G LTE services, but its first priority remains acquisition of airwaves in 800 MHz band, according to Ranjan Banerjee, the company’s head of strategy.