Business Daily from THE HINDU group of publications
May 22, 2009
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DoT puts 3G, TCIL stake sale on Cabinet panelís agenda

Thomas K Thomas

New Delhi, May 21 The Department of Telecom has listed five issues on the agenda for the new Cabinet Committee on Economic Affairs including finalising the reserve price for 3G auction and sale of stake by Telecommunications Consultant of India Ltd in Bharti Hexacom.

The other issues for which DoT has sought decision from CCEA includes a proposal to allocate Rs 450 crore for setting up a interception and monitoring system and revival of Tamil Nadu Telecommunications Ltd. Provision of equal pensionary benefits to the absorbed employees of MTNL as available to employees of BSNL has also been listed for consideration by the CCEA.

Of the five issues listed by DoT, the most important one for the telecom sector will be the reserve price for 3G services. DoT had initially proposed to set the base price at Rs 2,020 crore for 5 Mhz spectrum pan India. This was, however, objected to by the Ministry of Finance as it wanted to earn higher revenues from selling spectrum. The Finance Ministry had suggested to double the base price to over Rs 4,000 crore.

To resolve the issue, DoT took the matter to the CCEA which, in turn, asked a Group of Ministers to find a consensus.

In the case of TCIL, DoT had given its approval to divesting its 30 per cent stake in Bharti Hexacom, a company which offers mobile services in Rajasthan. The stake sale has been hanging in the balance for more than three years. In this case too, the Department of Economic Affairs had raised apprehensions over the proposed sale on the grounds that with the ongoing economic turmoil, the government may not be able to get the right value for its stake.