Vodafone offers Rs 4000 cr to renew 3 licences - Daily News & Analysis

In a development almost certain to impact the reserve price of the telecom spectrum auctions slated for August, Vodafone India has offered to pay the government Rs 4,000 crore for extension of its 2G licences in three key circles for 20 more years. That's a quarter of the Rs 16,000 crore reserve price set by the government in the auctions in March this year, which failed due to lack of bidders. The company has offered to pay Rs 1,700 crore for Delhi, Rs 1,700 crore for Mumbai and Rs 600 crore for Kolkata circles, where its licences come up for renewal in November 2014. The consideration is towards licence extension along with the current mix of spectrum and a flat spectrum usage charge of 3% of the annual gross revenue. "We had applied for extension of our licences on December 19, 2012 and asked DoT (Department of Telecommunications) to come up with mutually agreeable terms for licence extension. However, DoT incorrectly rejected our application on the ground that we were seeking the same terms and conditions as when we received the first set of licences, which is untrue," a Vodafone spokesperson said. While suggesting the Rs 4,000 crore sum for the 1800 MHz spectrum and licences, Vodafone said it was open to negotiations on the licence fee in order to come to a mutually acceptable decision. For renewal of its 900 MHz spectrum, the company said, it was willing to pay 1.3 times the reserve price for 1800 MHz spectrum arrived at by the market. Vodafone also requested that DoT offer it the option of staggered payment for the licence fee, as it had done in the November and March auctions. The industry sees Vodafone's offer helping the stakeholders arrive at an reasonable reserve price. "Vodafone's suggestion will serve as a data point for the reserve price, although the final price will be decided by an open house discussion with other industry players after Trai emerges with the new reserve price," said Rajan Matthews, director general of GSM lobby Cellular Operators' Association of India. Mahesh Uppal, director, Com (First) India, a telecom firm dealing with regulatory affairs, concurred, saying, "Vodafone's offer represents one more appeal from the industry to reduce the reserve price." Spokespersons of Airtel and Idea, whose licences also come up for renewal in late 2014, declined to comment. via Business - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNFHoq02r5AgDKYZvgB3rwXRREx28A&url=http://www.dnaindia.com/money/1855946/report-vodafone-offers-rs-4000-cr-to-renew-3-licences

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