By R. Jai Krishna
NEW DELHI--India's telecommunications regulator on Wednesday
proposed the starting prices for an upcoming auction of frequencies
to cellphone companies whose permits are set to expire later this
year.
The Telecom Regulatory Authority of India suggested that the
Department of Telecommunications auction frequencies in the
900-megahertz band with a starting price of 30.04 billion rupees
($489 million) per unit and in the 1800-megahertz band at 21.38
billion rupees ($348 million).
Auctions will not be held for the 900-megahertz band in four
service areas, and in two service areas for the 1800-megahertz band
as frequencies aren't available in those areas, the regulator
said.
India is divided into 22 telecommunications service areas based
on population and the business viability of providing cellphone
services.
The auctions are crucial to India's top four cellphone operators
Bharti Airtel Ltd., the local unit of Vodafone Group PLC., Idea
Cellular Ltd., and Reliance Communications Ltd., whose permits in
some of the service areas are set to expire in the next two years.
These operators use frequencies in both bandwidths to provide
cellphone services.
For the government, the frequency auctions--which include those
holding bandwidth beyond a specified limit--are expected to bring
in much needed funds to raise nontax revenue to plug India's
widening fiscal deficit.
India's federal government expects to raise 454.71 billion
rupees from sale of frequencies during the current fiscal year
through March 2015.
The telecommunications regulator has also asked the government
to put up for auction frequencies that allow operators to offer
high-speed third-generation and fourth-generation
telecommunications services on cellphones and tablet computers,
before the current set of proposals are finalized.
The proposals will now be discussed by the Telecom Commission, a
panel of Indian officials within the federal telecommunications
department that decides on policy issues.
Write to Jai Krishna at jai.krishna@wsj.com
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