Sistema Shyam TeleServices Ltd (SSTL) announced today it will not bid in the spectrum auctions next month because of the high reserve price of the 800MHz band and other unresolved issues with the Department of Telecom (DoT) related to the auction in 2013.
The company, which operates under the MTS brand and has less than a 1 per cent market share, said in a statement that it has “consistently maintained that the pricing of 800MHz spectrum at INR36.46 billion ($696 million) per MHz is way out of line and does not merit a strong business case for buying additional spectrum”.
The base price for 800MHz band is higher than the base price fixed by government for the auction in 2012, when no bidder emerged for the CDMA spectrum, the Economic Times said.
The company complained that the pricing does not take into account the realities of the prevailing ecosystem within the 800MHz band.
Sistema JSFC and the Russian government collectively hold 73.8 per cent in SSTL.
At the end of last month the DoT pushed back spectrum auctions by a week to 4 March to give it more time to respond to questions raised during a pre-bid meeting held in mid-January.
The statement from SSTL went on to say it has approached the TDSAT (Telecom Disputes Settlement and Appellate Board) seeking direction against the DoT for reassignment/rearrangement of the blocks/frequencies of liberalised spectrum allotted to SSTL during the auction held in March 2013 in eight circles for its CDMA services.
SSTL has contended that the terms and conditions of the auction permitted rearrangement of frequencies of liberalised spectrum with the other operators without any additional charge. “However, since SSTL was the sole bidder during the auction and there is no other successful operator for rearrangement of frequencies, it is incumbent upon DoT to rearrange/reassign the frequency to make the spectrum allotted to SSTL contiguous.”
SSTL said that allocation of spectrum in a non-contiguous manner reduces the efficiency of spectrum and hinders the adoption of latest technologies.