Even as the Indian government deliberates on whether to seek more time from the Supreme Court of India to conduct 2G spectrum auctions following its order canceling 122 licenses, media reports suggest that incumbent telecom operators like Airtel, Vodafone and Aircel are planning to participate in those auctions.
The telcos will ask the Telecom Regulatory Authority of India to not discriminate between old and new players, an Economic Times report stated. In fact, in response to the TRAI’s pre-consultation paper on “Allocation of Spectrum in 2G ban in 22 service areas by auction,” Vodafone stated that all available spectrum in the band – both returned spectrum and currently un-allocated spectrum – should be made available in the forthcoming auction.
“All operators and potential new entrants should be allowed to enter the auction. This will ensure the most efficient allocation of the spectrum and is necessary to derive a fair market price. It would not be logical to restrict the auction only to the spectrum which was allocated in 2008, and only to the parties which acquired the spectrum in 2008,” Vodafone stated in its response.
The telecom operator, while agreeing with the principle that spectrum caps helps to ensure that it does not become too concentrated in the hands of few operators, stated that excessive fragmentation reduces the value of spectrum. The company said an appropriate cap at this time would be around 25% of the total spectrum assigned in GSM/CDMA bands.
“Spectrum usage charges should be reviewed before the auction design is finalized. The current regime of escalating charges based on the total quantity of spectrum held means that new entrants pay significantly less per unit of spectrum acquired than existing operators. This is likely to lead to lower bids from existing operators, which will negatively influence the final prices and the efficiency of the auction,” Vodafone stated.
Meanwhile, Uninor in its response stated that only “private respondents” (whose licenses have been quashed by the supreme court judgement) and fresh applicants (well funded entities with no link to incumbent operators) should be eligible to take part in the spectrum auction.
While calling for clarity on structure and availability of spectrum, Uninor stated that the auction should be implemented as quickly as possible.
“Spectrum released due to the cancellation of licenses pursuant to the [supreme court] judgment along with spectrum already available with the GoI in the 2G band should be added to the auction pool,” the company said.
Uninor also asked for a spectrum cap of one lot per circle. The company said that as the last discovered price of the pan-India 2G spectrum was 335.31 million, the same could be considered as the reserve price for the proposed 2G auction.
Loop Telecom, in its response to TRAI, stated that the auction of spectrum released due to cancellation of licenses should be limited to only those operators whose licenses have been quashed and/or for applications that are pending for grant of UASL in the Department of Telecom as on Sept. 30, 2007.
Loop stated that the existing players can bid for additional spectrum that the government wants to auction.
