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Uncertainty over 2G spectrum pricing continued with the empowered Group of Ministers postponing its meeting on Thursday.
There was no official word on the reason for postponing the meeting and also no new date for the next meeting was announced. Government sources said that the Finance Minister, Mr Pranab Mukherjee, who is also heading the eGoM, was not comfortable taking a decision on the controversial issue with just few days left for him to file his nomination for the Presidential race.
On Wednesday, the Officer on Special Duty to the Finance Minister had sought clarity on whether it would be appropriate for Mr Mukherjee to head the GoM since his nomination has already been announced.
In response the Prime Minister’s Office had taken a view that a decision should be arrived at before Mr Mukherjee exits. Despite the direction from PMO, Mr Mukherjee decided to play it safe and has left it to his successor to take a decision.
This could now delay the auction process by a few weeks raising doubts about whether the Government will be able to meet the deadline set by the Supreme Court. The apex court had directed auctions to be held by August 31 and cancel all 2G licences issued on or after January 10, 2008 by September 7.
The delay means that new players including Telenor and Sistema will have to wait longer to know the fate of their Indian investments.
According to Government sources, the policy could also be routed through the Cabinet.
However, the delay gives more time to the incumbent players to lobby for lowering the reserve price for 2G spectrum. The TRAI has suggested fixing the base price at Rs 18,000 crore for 5 Mhz pan India but the telecom companies want this to be reduced by at least 80 per cent.
The GoM was also supposed to take a decision on whether or not to allow telecom companies to mortgage spectrum to lending banks. While the Reserve Bank of India has given its approval to mortgaging spectrum, the Department of Telecom does not want to give away the rights to sell spectrum to banks in case a telecom company defaults.
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