Idea Cellular wants 2G spectrum reserve price fixed at 2008 rates

Idea Cellular has urged the telecom ministry to ensure that the reserve price for 2G spectrum be fixed at 2008 rates and not as per the recommendations of the Telecom Regulatory Authority of India (TRAI).

Referring to the regulator's recommendations, Idea Cellular – part of the Aditya Birla group – noted they were in gross violation of the Supreme Court directive. The company said the entire spectrum attached to the 122 licences cancelled by the apex court should be put up for auction.

''The (court) order does not lend itself to mutilation by any reduction from 122, in the number of licenses to be auctioned,'' said the letter to the ministry. ''Equally, the order does not lend itself to diversion of the spectrum attached to the quashed 122 licences to any one, other than the new licence auction winners.''

The reserve price should be the price paid in 2008, plus notional interest for the intervening period, it added. ''The winner and the winning price must emerge from the auction.'' The reserve price paid in 2008 was Rs1,658 crore, whereas the TRAI had recommended a reserve price of Rs3,622 crore.

''Anything lower would confer a potential benefit to the winner not intended by the order,'' said the leading telecom operator. ''Equally, anything higher would inflict a potential penalty not intended by the order, quite apart from vitiating true price discovery.''

Idea Cellular also pointed out if any of the operators, whose licences had been cancelled by the Supreme Court, won in the auction then the original amount paid by the firm should be adjusted against the bid amount. The company itself had lost nine licences following the February court order.

According to Idea, the spectrum attached to the cancelled licences should not be diverted to older licensees in the same circle, as they were ineligible for a new licence.
Many other top telecom operators, including Airtel and Vodafone, have slammed the TRAI proposals. Similarly, both the Cellular Operators Association of India and the Association of Unified Service Providers of India are also opposed to the TRAI's move. The industry fears that if the regulator's proposal is accepted, the incumbent players may end up paying more than Rs50,000 crore.