The Empowered Group of Ministers headed by Home Minister P Chidambaram today decided to recommend to the Cabinet a lower than sector regulator TRAI- proposed reserve price for auction of spectrum. The reconstituted EGoM, which met for the second time this week in New Delhi firmed up its views on key issues like reserve price, spectrum usage charge and terms of payment.

The same are being sent to the Union Cabinet headed by Prime Minister Manmohan Singh for a decision, Telecom Minister Kapil Sibal said after a two-and-half-hour long meeting. The Telecom Regulatory Authority of India (TRAI) had recommended a base price of 3,622 crore rupees per unit of spectrum, called MegaHertz, for the auction of spectrum vacated from Supreme Court cancelling 122 licences issued by the then Telecom Minister A Raja in 2008.

This base price translated to over 18,000 crore rupees for a pan-India spectrum for new companies.
He said that the Empowered Group of Ministers is going to make a specific recommendation on each of these issues to Cabinet so that Cabinet decides on it finally.

Telecom companies bidding in the auction will pay to the government an annual fee for using airwaves, called spectrum usage charge, besides the price at which they buy the spectrum.The industry had been pitching for a 80 per cent cut in the reserve price as they felt TRAI recommended rates would lead to upto 100 per cent hike in mobile telephone charges.