Cell phone service provider Sistema Shyam Teleservices (SSTL) won spectrum in the 800 MHz band in eight circles valid for 20 years for `3,639 crore at the auction held on Monday.
The lone bidder in the second round of the auction that operates the MTS network would have to pay 25% of the final bid amount within 10 days, followed by a payment moratorium until March 2016. In a statement released by the company, they said that SSTL will be able to set off the previous licence cost of `1,626 crore against the new spectrum cost.
SSTL had lost their licence in 21 circles after the Supreme Court’s decision to cancel 122 licences in the wake of irregularities in spectrum allocation amounting to estimated losses of `1.76 lakh crore to the exchequer. In November 2012, the government saw no responses for the 800Mhz spectrum and had slashed the reserve price by 50%. The company claims to have a customer base of over 12.1 million, out of which 13 per cent come from the impacted circles.
It has decided not to bid for Mumbai, Maharashtra and UP East circles and have initiated steps to inform its customers in three circles to port out to other telecom operators of their choice. “Given the range of variables we have considered and the spectrum cost for 800 Mhz, it was a big challenge to arrive at a core list of 8 circles and to bid accordingly”, Vsevolod Rozanov, President & CEO, SSTL said.