The Hindu Business Line : FICCI chief urges PM to review spectrum pricing

New Delhi, Sept. 26 Mr Rajeev Chandrasekhar, MP from Bengaluru and FICCI President, has in a letter to the Prime Minister urged the need to have an open market-based method to establish value of spectrum so that the exchequer does not lose out.

Mr Chandrasekhar’s letter follows a recent deal by Swan Telecom whereby the company sold 45 per cent stake to UAE-based Etisalat for $900 million.

Huge arbitrage

The former promoter of BPL Mobile pointed out that the arbitrage between the value that the government was receiving for spectrum and the actual market value was to the tune of around Rs 8,000-9,000 crore.

On a base price of nationwide spectrum at approximately Rs 1,540 crore, this was an appreciation in the hands of the private sector of almost 600 per cent in a few months, he said.

Mr Chandrasekhar said in his letter that since spectrum was an asset of the government, it must be commercially compensated at the market value when it was being transferred to another entity or company.

Irrefutable evidence

“The transaction (between Swan and Etisalat) clearly established irrefutable evidence that the government’s pricing for spectrum of 4.4 MHz was far lower than the actual market value causing considerable loss to the exchequer. There is need for a comprehensive public policy when it comes to commercial terms of monetisation of public assets like spectrum, minerals and natural resources so that the exchequer gets its due,” he said.

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