Operators at loggerheads over 2G spectrum auction

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SME Times News Bureau | 17 Feb, 2012
Sharp differences between old and new telecom operators came out in the open Thursday over the forthcoming 2G spectrum auction following the Supreme Court's order cancelling 122 licences issued in 2008.

While the established players like Bharti Airtel were of the view that all players should be invited for the auction, new ones such as Uninor argued that the auction should be open to only the new players and it should be conducted in two phases.

In the first phase, the spectrum freed because of the revoked licences should be auctioned. And in the second, any remaining spectrum available with the government should be put under the hammer, Uninor contended.

However, this has not gone down well with the incumbents.

"Some of the affected operators have been pushing that the auction be restricted to those operators whose licences stand quashed. We firmly believe that such suggestions are contrary to the Supreme Court order," said Bharti Airtel in response to the pre-consultation paper issued by the telecom regulator on 2G auction.

Rubbishing the proposed two-stage auction method, Airtel said that in the auction scenario, the concept of "initial spectrum" or "start-up spectrum" did not exist. The auction recommendations must cover the spectrum allocations to all the eligible participants.

The telecom major has, however, mentioned that those operators, whose licences were recommended for cancellation by the sector regulator earlier for non-fulfillment of roll-out obligations should not be allowed to bid.

Another player, Vodafone said all the players should be allowed for auction and added that the government should auction all available spectrum in the band -- both returned and that currently unallocated -- in the auction to facilitate better service to consumers at cheaper prices.

"Unused spectrum brings no use to consumers. Spectrum to the mobile industry will bring cheaper data and voice services to more people, increase productivity and support other industries, and reduce the need for additional base stations," Vodafone said.

On pricing, however, a majority of the players are unanimous on fixing the reserve price at Rs.1,658 crore -- the price charged for a pan-India 2G licence in 2008.

"If reserve price is set at any different level to existing price discovered for 1800 MHZ of Rs.1658 crore, then it will not meet the objective of equality and level playing field for all participants," said Idea Cellular.

The Association of Unified Telecom Service Providers of India (AUSPI), an association of mainly CDMA operators, on the other hand, has suggested separate auctions for CDMA and GSM players.

It has said that incumbent operators having maximum prescribed limit spectrum of 8 MHz in circles and 10 MHz in metros for GSM and 5 MHz in circles and 6.25 MHz in metros for CDMA should be barred from participating in the auction in order to "achieve the level playing field" and to "prevent monopolisation of scarce resource".