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Telecom panel sticks to its decision on ‘net worth’ eligibility of bidders to participate in airwave auction

05 Jan 2015 Evaluate

Retaining its earlier decision on net worth eligibility of bidders, Telecom panel reiterated that only telecom players with net worth of over Rs 100 crore, irrespective of whether they were holding spectrum or license or were new entrants in a band or a circle, could participate in the upcoming airwave auction. However, for the North East region and J&K service area, the net worth requirement for companies has been fixed at Rs 50 crore.

According to the telecom panel, strong balance sheets of telecom players bidding for airwaves would ensure efficient roll out of quality telecom services. With this, telecom operators like Aircel and Tata Teleservices (TTL) would find it difficult to bid for airwaves in the coming auction.

However, as per few media reports, note on the minutes of IMC meeting, held late last month, suggested that the committee had decided to hold on to its earlier view on the net worth as it felt lower availability of funds with a bidder would lower its capacity to raise funds, which in turn could hamper smooth running of its operation, expansion plans and quality of service.

Nevertheless, Telecom Panel also cited government's Digital India initiative as a reason crucial enough to ensure the financial strength of bidder for quick roll out of services.

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