Indian-based mobile operators have upped their campaign against the Telecom Regulatory Authority of India (Trai)’s controversial recommendations for a 2G spectrum auction.
Uninor, the Indian joint venture between Norway’s Telenor and Unitech,…
Indian-based mobile operators have upped their campaign against the Telecom Regulatory Authority of India (Trai)’s controversial recommendations for a 2G spectrum auction.
Uninor, the Indian joint venture between Norway’s Telenor and Unitech, received the green light to legally challenge Trai’s recommendations, and operators today discussed the issue with the Indian government.
According to a Telenor statement, CEOs from several Indian mobile operators met with government officials today to discuss “the disastrous impact of the Trai auction recommendations on the ability to continue operations”.
In early February, the Supreme Court asked the government to redistribute 2G spectrum – a consequence of the 122 licences it revoked as a result of the scandal-tainted 2008 allocation. The court ordered the auction should take place before 31 August, but no date has yet been set.
Earlier this month, Trai recommended reserve prices for the auction; specifically Rs72.44bn (US$1.37bn) for 5MHz of the 700MHz band, Rs36.22bn (US$685m) for 5MHz of the 800/900MHz band, and Rs18.11bn (US$343m) for 5MHz of the 1800Mhz band.
The recommendations, which are expected to be examined by the Department of Telecommunications (DoT), have attracted strong criticisms from operators, which have argued they would have a detrimental effect on the whole sector and drive up prices for consumers. Several telcos have announced intentions to shut down their operations in the country.
In its statement today, Telenor said it maintains Trai’s recommendations do not align with the Supreme Court’s 2G ruling. It argued the “limited” spectrum available, “regressive” rollout obligations, and “high” reserve prices completely ignore submissions made by operators during the regulator’s consultation phase.
Telenor CEO Fredrik Baksaas called upon the government to take charge of the situation.
“This is the time to ensure that the policy made for the telecom licence auctions allows affordability, competition and investments to remain in India,” he said.
“India must remain an attractive destination for all foreign investors across industries, not only because of the growth potential it indeed offers, but also its predictable, logical and investor-friendly policy environment.”
Trai faces court challenge
Meanwhile, Uninor has announced it has received clearance from the Supreme Court to file an application challenging the Trai recommendations.
“The court has allowed us to file an application and stated that it is open to hearing our arguments,” Uninor said in a short statement. A spokesperson declined to comment further.
Telenor has written down about NKr 8.1bn (US$1.4bn) following the Supreme Court’s 2G ruling as “a precautionary measure”. The company has said that, if the DoT accepts Trai’s recommendations, it will be “almost impossible” for it to participate in the auction.
In a further update, India’s Economic Times has reported the DoT has rejected Trai’s proposal to control spectrum licences. In April, the regulator recommended the government should focus its attentions on allocating spectrum, while it should take responsibility for all licensing functions.
According to the report, which cited “officials aware of the development”, the government has decided to retain both functions.
