  The government continues to get flak from the telcos and the telecom lobbies following recommendations on spectrum auction. They all are expressing fears that they will prove to be an impediment to the economic growth of the country, discourage foreign investment and result in hike in tariff.
The global telcom lobby GSMA and the leading telcos are speaking in one voice to oppose the recommendations.
Regulatory Authority of India (TRAI) recently proposed a minimum or base price of Rs 3,622.18 crore for every mega Hertz of spectrum in the 1800 MHz band, where radio airwaves have been vacated following the Supreme Court’s verdict on February 2 cancelling all the 122 spectrum licences allotted in 2008 during the tenure of the former telecom minister A Raja.
"High upfront reserve prices can deter operators in taking part in an auction and high prices flow through into high mobile prices which can retard growth in the number of subscribers and limit call volumes leading ultimately in reduced overall economic growth," GSMA Director General Anne Bouverot said in a letter to Sibal.
India’s five leading telcos Bharti Airtel, Vodafone, Idea, Uninor and Videocon have also slammed the TRAI’s recommendations for spectrum auctions terming them as 'flawed, retrograde, regressive and uncertain”.
Reacting sharply to these recommendations, they demanded that all airwaves in the 1800 MHz band be put up for auctions, and the reserve price be slashed by 80%.
In a joint letter to the telecom minister Kapil Sibal the CEO’s of these telcos warmed the government that the steep hike in the reserve price for auction would result in the rise of tariff by 30 percent.
Bharti Airtel CEO for India and South Asia, Sanjay Kapoor, Vodafone India MD and CEO Marten Pieters, Idea Cellular managing director Himanshu Kapania, Uninor chief executive Sigve Brekke and Videcon Telecommunication director and CEO Arvind Ball, expressed fears that TRAI proposal, if accepted, will sound the death knell for Indian telecommunications and also lead to prolonged disputes and litigation.
"Holding back about 80% of the available spectrum and placing only 5MHz for auction in each service area, will result in a totally unrealistic and inflated market value caused through creation of artificial scarcity. By severely throttling the supply to 5MHz, Trai is trying to artificially distort the auction result, going against the directions of the Supreme Court," these telcos said.
“Trai had failed to 'appreciate that such high prices were completely unsustainable in a highly price sensitive market such as India, whose average revenue per user of less than Rs 90, had poor rural teledensity and required huge investments to rollout networks in rural and remote areas”, the letter said.
The various telcos’ lobbies are also crying foul over the TRAI’s recommendations. GSMA on Friday said “Efforts to squeeze money out of mobile operators for some perceived short term gain will only reduce investment in networks, inhibit growth of mobile services and drive up consumer prices limiting the value the public will derive from the spectrum resource in the long term”.
Earlier The Cellular Operators Association of India (COAI) said it was surprised that the regulator was consistently overlooking 'illegalities' being committed by the likes of Tatas and RCom, that were given GSM spectrum between September 2007 and March 2008 by jailed telecoms minister A Raja without any additional licence, and against policy n |