New Delhi, September 9
The Telecom Regulatory Authority of India (TRAI) today recommended a 60 to 81 per cent cut in the base price of the spectrum which will come up for auction soon.

TRAI has said that pan-India base price for per mhz of 1,800 mhz spectrum band be fixed at Rs 1,496 crore which is 60 per cent lower than Rs 3,622.18 crore - the base price which the government had set during the auctions carried out in March last.

The March auction had failed miserably with the telcos staying away citing high base price as the reason. While there was not even a single bidder in the 1,800 MHz segment, there was just a single bidder in the CDMA segment.

This time TRAI has not recommended auction for CDMA spectrum. The regulator has proposed allowing trading of spectrum by those who buy airwaves through auctions.

It also said no spectrum would be reserved for existing players when their licences expire and suggested that airwaves can be traded.

The government has to auction the premium 900 Mhz band being held by Airtel, Vodafone and Loop in some circles as their licences expire in the second half of 2014. No priority will be accorded to these licensees, the regulator said.

For the 900 mhz band, it has recommended a pan-India base price of Rs 288 crore for Delhi, Rs 262 crore for Mumbai and Rs 100 crore for Kolkata. For these circles, telcos will have to begin bids in the 1,800 mhz band at Rs 175 crore for Delhi and Rs 165 crore for Mumbai circles.

TRAI slashed the combined spectrum auction reserve price in the premium 900 MHz band in the circles of Delhi, Mumbai and Kolkata by about 79 per cent to Rs 650 crore per MHz against Rs 3,074.18 crore per MHz earlier.

The maximum reduction of 81.38 per cent is in the Mumbai circle, where the floor price has been reduced to Rs 262 crore per MHz compared with Rs 1,404.28 crore per MHz of spectrum, as per the regulator's previous recommendation.

Announcing the new base prices, TRAI chairman Rahul Khullar said, "Please understand the approach has completely changed from the previous pricing regime."

TRAI has taken into consideration various conditions, including the failing financial health of the telecom operators, before coming out with the new pricing.

TRAI has recommended that for auction of spectrum in 1,800 MHz band, the block size should be of 2x200 KHz each and the existing licensee will have to bid for a minimum of three blocks.

A new entrant will be required to bid for a minimum of 25 blocks of 2x200 KHz each.

And for auction of spectrum in 900 MHz band, the block size should be 2×1 MHz with the condition that each bidder will have to bid for a minimum of 5 blocks.

When asked about the relief, if any, for telecom service providers that bid in the November auction, Khullar said, "We are only recommending reserve price and it is not the final price. Let market-determined price come through auction then we will decide what to do." 

New Delhi, September 9
The euphoria following the appointment of Raghuram Rajan as the new RBI Governor may be ‘short lived’ as markets are placing ‘too much hope’ on the former IMF chief economist to bring the country out of the current economic mess, brokerage Macquarie says in a report.

"Much as we are happy about Rajan's appointment, we are also aware of the challenges he faces, both in terms of the economic problems facing India and also what awaits him in his dealings with politicians and the bureaucracy," Macquarie said in a research note.

The former IMF chief economist announced a series of new steps to control the currency volatility on the very day he took charge of RBI.

"The positive reaction from the markets to Dr Rajan’s appointment is similar to when P Chidambaram took over as the Finance Minister and announced a series of reforms...

"Indeed there is no good precedent to this as Chidambaram’s big entry last year was somewhat dampened earlier this year when the market placed too much hope on the Union Budget, only to be disappointed when it didn’t hear any ‘big bang’ reforms," Macquarie said.

He (Chidambaram) seems to be fighting a lone battle to meet the fiscal deficit target of 4.8 per cent while his party is busy rolling out the food security bill, Macquarie said adding "Rajan will likely face similar issues in that his far-reaching yet perceived 'radical' ideas may not find favour with the majority in the government."

According to Macquarie, monetary policy alone won't do the trick, as economic data continues to be weak, uncertainty around quantitative easing still persists and the earnings season next month is likely to disappoint.

"That said, better clarity on the RBI's stance and direction of future policy would go a long way in instilling confidence in markets," Macquarie added.

"We don't think there will be complete reversal in the RBI's current stance of maintaining tight liquidity else it runs the risk of yields falling and capital flowing out leading to further pressure on the currency and higher inflation expectations," Macquarie said. — PTI 

New Delhi, September 9
Diversified business conglomerate Jaypee Group is likely to sell some of its power and cement assets in order to pare debt, according to sources.

The company is likely to sell equity in two of its hydro power projects and is in discussion with some players. On asked about the development, a Jaypee Group spokesperson declined comment.

As per a report by brokerage Credit Suisse, the gross debt of Jaypee Group as on March 31, 2013 stood around Rs 64,000 crore.

According to reports, Abu Dhabi Water & Electric Authority (ADWEA) is likely to acquire two hydro-power projects in Himachal Pradesh from the company.

The company may sell equity in its 300 MW Baspa II and the 1,000 MW Karcham Wangtoo project in Himachal Pradesh. The company may soon sell 31 per cent of its equity in the Gujarat cement plant, sources said.

Aditya Birla Group's flagship Ultratech Cement is at an advanced stage of negotiation with Jaypee Cement Corporation to acquire its 31 per cent stake in the 5 mtpa (million tonnes per annum) Gujarat facility for about Rs 4,000 crore, they added. — PTI

New Delhi, September 9
The government today released detailed draft norms for various clauses of the new Companies Act that replaces a nearly six decade-old legislation and overhauls the way corporates function and regulated in the country.

Releasing the first set of draft rules, covering 16 out of total 29 chapters of the Companies Act 2013, the government invited comments from public and other stakeholders till October 8 and said the second tranche of these rules would be released next week.

The first tranche covers rules governing new norms for the board of directors, auditors, registration and incorporation of companies, revival of sick companies, financial accounts of corporates, foreign incorporated companies among others.

Besides, draft rules have been issued for chapters on declaration and payment of dividends, prevention of oppression and mismanagement, nidhis and miscellaneous. 

New Delhi, September 9
Gold prices tumbled by Rs 625 to Rs 31,100 per 10 grams here today on sluggish demand at prevailing higher levels amid a weak global trend. However, silver held steady at Rs 54,300 per kg in scattered buying from industrial units and coin makers.

Traders said sluggish demand at prevailing higher levels and weak global trend on speculation Fed Reserve policy makers will reduce monthly debt purchases this month, pulled down gold prices. — PTI