'Allow all cos to bid in 2G auction'

'Allow all cos to bid in 2G auction'

Telecom tangle: Players making contradictory claims

Telecom services major Vodafone India today said all operators — old and new — should be allowed to participate in the proposed 2G auction to ensure that the government gets a fair market price for the scarce commodity like spectrum.

“All operators and potential new entrants should be allowed to participate in the auction.

This will ensure the most efficient allocation of the spectrum, and is necessary to discover a fair market price,” Vodafone India said in a statement.

Telecom regulator Trai had invited views from stakeholders for framing rules to auction spectrum for telecom services, after the Supreme Court cancelled 122 licenses given in 2008 earlier this month.

The Supreme Court had directed Trai to issue new guidelines for granting of licences and allocation of spectrum through auction.

“It would not be logical to limit the auction only to the spectrum which was allocated in 2008, and only amongst the parties which acquired the spectrum in 2008,” Vodafone said adding that in such case, the supply of spectrum would be equal to or less than the demand for the spectrum.

“Such artificial restriction would lead to an outcome no different from an administered price regime,” it added.

New operators like Sistema Shyam and Uninor have been pushing for exclusion of incumbents in the proposed auction saying old operators should not be allowed to participate.

Vodafone India and other old operators like Bharti Airtel and Idea Cellular on the other hand, who haven’t suffered from the ruling, have been resisting this plea.
Vodafone India also pushed for ensuring availability of both returned spectrum and currently un-allocated spectrum in the forthcoming auction.

“Unused spectrum brings no benefit to society or consumers,” it said.
On spectrum usage charges, Vodafone said the pricing should be reviewed before the auction design is finalised.

“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,” Vodafone said.

This is likely to lead to lower bids from existing operators, which will negatively influence the final prices and the efficiency of the auction, it added.

The company also said that the reserve prices should not be set based on the prices paid in the other auctions.