EGoM decision “incrementally positive” for the sector
06 Jun 2012
The empowered group of ministers' (EGoM) decision to sell up to 13.75 MHz of spectrum in the 1800 MHz band in the upcoming auctions is ''incrementally positive'' for the sector, says Barclays Research.
''We believe that this should be able to satisfy the current demand of the 2G spectrum both from new players and from existing participants. Further, if the entire 13.75 MHz is taken, there would not be enough spectrum left for 900 MHz re-farming,'' it said in a note.
This would bring the total 1800 MHz spectrum to the auction block at 13.75 MHz per circle. This is an incrementally positive step over the 5 MHz that was initially recommended by TRAI and 10 MHz suggested by the Telecom Commission for auction last week.
The key decision now pending is the reserve price for the spectrum.
The final auction price would also serve as a benchmark for license renewals. Hence, it could have far reaching impact on the health of
the industry.
''Given the recent measures by the government in other sectors (coal availability, petrol price hike, infrastructure), we believe that the possibility of an industry friendly decision has increased,'' it added.
