Sistema’s India unit bemoans auction starting price

CEO says ‘no rationale’ for why CDMA reserve is 1.3 times higher than GSM base price.

The Indian unit of Russia’s Sistema JSFC Tuesday termed as “excessively high” the base price set by India to commence an auction of telecommunications bandwidth.
On Friday, the federal cabinet set the base price for the spectrum auction at several times more than what companies paid in 2008 to buy telecom licenses that then came bundled with spectrum.
The Supreme Court earlier this year revoked all the licenses issued in 2008, including those of Sistema’s unit, citing corruption in their allotment. The court also ordered auctioning of the spectrum to be surrendered by the affected companies.
According to the prices set by the cabinet, the auction of bandwidth to provide CDMA-based services will start at a base price of about 182 billion rupees ($3.3 billion). This is 1.3 times the starting price of 140 billion rupees for a 5.0-megahertz slot to provide services across the country using the popular GSM technology.
Sistema’s unit provides services on the CDMA platform. India is auctioning airwave in the 1,800 MHz frequency band for providing services under GSM and 800 Mhz band for CDMA.
“There is no rationale to support why the 800 Mhz CDMA spectrum should be priced 1.3 times more than the GSM 1800 Mhz spectrum,” Sistema Shyam Chief Executive Vsevolod Rozanov said in a statement.
Sistema needs to get new spectrum by Sept. 7, until when the court has given permission to provide services under the cancelled licenses.