More telcos are expressing concerns over pricing proposals from India’s regulator for the country’s upcoming 2G auction, threatening to take drastic measures if no adjustments are made.
Andrey Terebenin, VP of Russian conglomerate Sistema, …
More telcos are expressing concerns over pricing proposals from India’s regulator for the country’s upcoming 2G auction, threatening to take drastic measures if no adjustments are made.
Andrey Terebenin, VP of Russian conglomerate Sistema, warned that the group would pull out of the country if the government accepts the 2G reserve prices recommended by the Telecom Regulatory Authority of India (Trai).
Sistema is present in India via Sistema Shyam Teleservices (SSTL).
The joint venture is among the eight operators that will have their 2G licences cancelled as per India’s Supreme Court ruling on the country’s 2G scam.
To allow operators to bid again for 2G spectrum, it was announced that a new 2G auction would take place before 31 August.
Shortly after, Trai made several recommendations regarding the price of spectrum in the 700MHz, 800/900MHz, and 1800MHz bands.
Several telcos and industry bodies have criticised the proposals, arguing these prices are much higher than the amount spent by carriers in 2008 to acquire spectrum.
SSTL, in particular, said that these recommendations are “anti-competitive, sure to raise tariffs, restrict choice to consumers and seem to favour a few telecom operators at the cost of new entrants.”
The JV added that the reserve price for 5MHz of spectrum in the 800MHz band should be set at Rs16.58bn (US$304m) instead of the Rs23.5bn (US$431m) proposed by Trai.
SSTL has also previously threatened to launch legal proceedings against the Indian government within the next few months in case the 2G dispute cannot be settled.
Norwegian telco Telenor, which owns a majority stake in Indian operator Uninor, may also decide to leave India because of the regulator’s proposals.
Norway’s trade minister Trond Giske was recently quoted telling reporters in New Delhi that India would lose vital foreign investment if Telenor decided to quit the country.
Axiata may halt investments in Idea
Meanwhile, Jamaludin Ibrahim, the CEO of Malaysian group Axiata which owns a stake in Idea Cellular, reportedly said that fresh capital may not be injected in the subsidiary if Trai’s proposals are approved.
Idea Cellular is India’s fourth largest mobile operator and has also been affected by the Supreme Court’s 2G verdict.
Ibrahim was, however, quoted telling reporters that Axiata is not exiting India, adding it is a long-term player in the country.
