Mobile companies stepped up their offensive against the telecom regulator's spectrum auction proposals. On Wednesday, leaders of four GSM companies met the Communications and IT Minister, Mr Kapil Sibal, the Finance Minister, Mr Pranab Mukherjee, and other top officials in a bid to pressure the Government into rejecting TRAI's recommendations.
CATASTROPHIC MOVE
Bharti Airtel Chairman, Mr Sunil Mittal, said the TRAI's proposals, if accepted, will be catastrophic for the entire telecom sector. “This has been the most destructive period of regulatory environment I have seen in 16 years,” he told newspersons.
“The recent regulatory developments in India will have significant implications on the future of telephony and broadband, as well as India's global competitiveness,” Mr Mittal said
Vodafone Plc CEO, Mr Vittorio Colao, Idea Cellular Chairman, Mr Kumar Mangalam Birla, and Telenor CEO, Mr Fredrik Baksaas, were also part of the industry delegation.
They met the Home Minister, Mr P. Chidambaram; the Deputy Chairman of the Planning Commission, Mr Montek Singh Ahluwalia; the Secretaries of the Department of Telecom and the Commerce Ministry; and the Joint Secretary to the PMO.
During the meeting, the telecom leaders reiterated the demands communicated to the Government through a joint letter last week. This includes reduction in base price by 80 per cent and putting all available spectrum for auction. They also want the proposal to re-farm 900 MHz band to be on put freeze.
After the meetings, Mr Baksaas said the Government should take responsibility for making the right policy.
“We urge the Indian Government to take its rightful political initiative now. This is the time to ensure that the policy made for the telecom licence auctions allows affordability, competition and investments to remain in India.”
Telenor has already written off the entire value of its Indian operations and has threatened to exit if the TRAI's auction rules are accepted.
Huge payout
Telecom companies are up in arms against the TRAI proposals, because if implemented they would result in a huge payout. The regulator has suggested a base price of Rs 18,000 crore for the 1,800 Mhz, which is over ten times the 2008 price. In addition, TRAI has said that only 5 Mhz spectrum chunk should be put on sale initially.
While Reliance Communications and Tata Teleservices were not part of the CEOs delegation, their industry association wrote a letter to Mr Sibal expressing concerns against the TRAI proposals.
“TRAI has tried to justify its recommendation of high reserve price by creating the concept of liberalised and non-liberalised spectrum. This thinking will take back our country to pre-NTP'99 days and pour water on the concept of technology neutrality,” said the Association of Unified Services Providers of India (AUSPI).
Reserve price
The association said that the reserve price for 1,800 Mhz may be fixed at the reserve price for 3G, that is, Rs 3,500 crore. “Any addition or higher reserve price may not be economically justified due to steep fall in ARPUs during the past two years,” said Mr S. C. Khanna, Secretary-General, AUSPI.