Sibal rules out refund of difference in spectrum cost

Telecom Minister Kapil Sibal today virtually ruled out refunding the difference, if any, between what operators paid in the last 2G auction in November and the price to be established in the next round of spectrum sale.

Participating in an open house discussion on telecom industry, which was attended by the Telecom Minister, Videocon Telecommunication's CEO Arvind Bali demanded refund of difference in amount paid by his company during November auction for 2G spectrum and the final price to be derived in the next round of auction.

"We have bought spectrum at distressed prices. In this auction whatsoever is the price established if there is difference I think that should be considered to be released out," Bali said.

Responding to the demand raised by Videocon, Sibal said: "You participated in an auction, now there is going to be new auction...you know this (the demand that government pay up the difference) is something that may never be accepted ...nobody forced you to participate in the auction."

Videocon was among those companies whose 21 licences were cancelled by Supreme Court in February and had to participate in auctions for continuing operations.

Asked about the future course of action, Bali said they are hopeful that the government will look into their demand.

Sources, however, said three operators who participated in November 2012 auctions have decided to approach court seek legal recourse if the government did not interfere on the issue as they were forced to buy spectrum at high costs to continue their services.

Telecom regulator TRAI on September 9 recommended a sharp 60 per cent cut in the floor price of mobile phone spectrum for an upcoming auction after two previous sales drew lukewarm response because of high reserve price.

TRAI made recommendations to the Government for the start or base price of auction of spectrum in 900 per megahertz (MHz) and 1,800 MHz bands used by GSM players to offer 2G, that remained unsold after two rounds of auctions in November and March.

It suggested a pan-India reserve price of Rs 1,496 crore per MHz in the 1800 band, down 37 per cent from the base price set in the previous auction, TRAI Chairman Rahul Khullar had said.

In the 900 MHz band, it recommended a reserve price of Rs 288 crore per MHz for Delhi, Rs 262 crore for Mumbai and Rs 100 crore for Kolkata. These rates are about 60 per cent lower than the reserve price in the previous auction.