Big telcos want spectrum auction to avoid TRAI price | india | Hindustan Times
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Big telcos want spectrum auction to avoid TRAI price

Competitors have turned allies in the country's frenetic telecom sector, with leading service providers lobbying with the government to immediately auction spectrum to avoid paying higher price for additional spectrum as determined by an expert panel set up by the industry regulator.

india Updated: Dec 02, 2011 00:17 IST
Manoj Gairola

Competitors have turned allies in the country's frenetic telecom sector, with leading service providers lobbying with the government to immediately auction spectrum to avoid paying higher price for additional spectrum as determined by an expert panel set up by the industry regulator.

Anil Ambani of Reliance Communications (RCom), Kumar Mangalam Birla of the Aditya Birla group, Sunil Mittal of Bharti Airtel, and Vittorio Colao of Vodafone have come together to plead for an early auction - in which only incumbents are likely to participate because new operators lack financial muscle.

When contacted, all the companies declined to comment.

"If an auction is held at the present, it will be limited only to a few existing old operators. Moreover, the banks and financial institutions will not fund the spectrum, resulting in low prices," said a government official.

The telecom chiefs want the price of spectrum beyond the 4.4 MHz start-up quota that comes with the licence to be determined through an auction process, and not a price determined by the Telecom Regulatory Authority of India (TRAI) panel.

Established GSM operators such as Bharti Airtel, Idea Cellular and Vodafone are holding spectrum beyond 4.4 MHz. New GSM operators RCom and Tata Teleservices also want additional spectrum. All want to avoid paying higher prices for the extra spectrum.

"A fair and transparent auction should be the preferred method for ascertaining the market value of spectrum, given the ambiguity involved in alternate methodologies," the operators, who met Prime Minister Manmohan Singh and TRAI chairman JS Sarma on Wednesday, said in a letter submitted to the communications minister Kapil Sibal.

The regulator had determined the prices on the basis of the 3G spectrum auction, which was open for all the operators. On the basis of this price, the existing operators would have to pay about Rs 18,000 crore for the additional spectrum they hold.

The regulator also said that the auction is the best mechanism to determine the fair price of spectrum. However, experts say that given the present market conditions, an auction may not yield a true value.

The operators also want that the spectrum should be auctioned in such a manner that "artificial scarcity of spectrum by limiting the amount of spectrum being auctioned should be avoided."

The Telecom Commission is due to hold a full panel meeting on Friday.