The upcoming auction for 2G airwaves will be open to all players including incumbent and new operators whose licences have been cancelled by the Supreme Court order. Indicating its views on the issue, the Department of Telecom has told the apex court that it will be able to complete the auction process by March 2013.
“The auction process will be open to all qualified entities, which may include some or all the existing licensees whose licences stand quashed in view of the judgment dated February 2,” the DoT has said in its clarificatory petition filed in the Supreme Court.
This could dampen the spirits of the new operators that wanted the upcoming auction to be restricted to those players that applied for licences in 2008. Telenor, for instance, has suggested that the auction should be held in two phases, with the new players getting the first right to bid.
Open auction
On the other hand, incumbent players such as Bharti Airtel and Vodafone are pushing for an open auction. Vodafone India, while responding to the TRAI's pre-consultation paper on 2G allocation, said: “It would not be logical to limit the auction only to the spectrum which was allocated in 2008, and only among the parties which acquired the spectrum in 2008. Such artificial restriction would lead to an outcome no different from an administered price regime.”
The Telecom Commission had earlier taken a decision on opening up the proposed auction for 2G spectrum to everyone. That's because the auction will be used to determine the market price for airwaves being used by the incumbent players. “Any form of restricted auction will not give the market price. If the bids are invited only from new players then price could be down as the supply of airwaves will be more than the demand,” said a DoT official.
According to the DoT, 519 units of 2G airwaves will be available post the cancellation of 122 licences as ordered by the Supreme Court. Some circles, such as Andhra Pradesh, Maharashtra and Kolkata have in excess of 30 units of spectrum. If all of it is put on the block, at least six operators can be accommodated, with each getting 4.4 Mhz. DoT officials, however, added that a final view will be taken after the TRAI submits its recommendations.
Review Petitions
The Government has, meanwhile, filed a petition in the Supreme Court on Friday seeking a review of the landmark verdict on 2G licences. The review plea has challenged the apex court's ruling that auction is the only fair route to allocate natural resources as also its finding that the Government's First Come First Served (FCFS) policy was flawed.
While the Government has not questioned the cancellation of the 122 licences, two of the affected players, Uninor and Sistema Shyam, also filed separate review petitions. Other affected operators including Idea Cellular and Tata Teleservices Ltd had earlier moved the Supreme Court seeking review of the judgment