Vodafone India has suggested alternative formula to derive the value of 2G spectrum and also for allocating airwaves in the 700 Mhz.
In a letter to the Department of Telecom, the mobile operator has suggested that instead of taking the pricing method proposed by the telecom regulator, the Government should take the 2007-08 prices as the benchmark and index the same at an inflation rate of 9 per cent. Going by this method, operators would have to pay around Rs 350-400 crore per Mhz instead of Rs 4,572 crore as suggested by TRAI.
“The pricing report submitted by TRAI is deeply flawed and cannot be the basis for any spectrum pricing decision. TRAI itself has stated that the numbers are not perfect. We are ready to accept a reasonable pricing as long as there is a quid pro quo in terms of lower spectrum charges,” said Mr T.V. Ramachandran, Resident Director, Regulatory Affairs, Vodafone India, adding that auction was the best way to derive spectrum price.
700 Mhz issue
On the issue of allocating 700 Mhz, Vodafone said the TRAI suggestion to keep out operators which already own spectrum in 800/900 Mhz was unfair. The operator said that all the service providers should be allowed to participate in the auction for 700 Mhz but the total spectrum held by an entity can be capped at around 25-30 Mhz. For example, if Vodafone holds 10 Mhz in the 900 Mhz band then it should not be allowed to acquire more than 20 Mhz in the 700 Mhz band.
TRAI had suggested to completely keep out operators which already have spectrum in the 900/800 Mhz bands unless they pay the one-time price.
“We submit that adopting the above restrictive and exclusionary approach would not only be most incorrect and unfair and also legally untenable, but would also adversely impact the efficiency of the auction process. The objective of level playing field would be met by allowing all operators to participate in the auctions process but capping the total spectrum that can be held by a single entity in the below 1GHz bands,” Vodafone said, adding that this practice has been adopted in some other countries.