Telcos blast TRAI proposals on fresh 2G auction

Five of India's mobile phone companies on Friday accused the Telecom Regulatory Authority of India of issuing a ''highly retrograde set of recommendations on spectrum auctions'' and demanded that communications minister Kapil Sibal reject all key proposals suggested by the regulator.

Using unusually harsh language, the chief executives of Bharti Airtel, Vodafone, Idea Cellular, Uninor and Videocon warned Sibal that accepting the regulator's ''flawed, retrograde, regressive and uncertain recommendations would irretrievably harm consumer interests, ring the death knell for the sector and lead to prolonged disputes and litigation''.

In their joint communication, Bharti Airtel chief executive for India and South Asia Sanjay Kapoor, Vodafone India managing director and chief executive Marten Pieters, Idea Cellular managing director Himanshu Kapania, Uninor chief executive Sigve Brekke and Videcon Telecommunications' director and chief executive Arvind Ball demanded that all airwaves in the 1800 MHz band be put up for auction, and the reserve price be slashed by 80 per cent to allow the market to discover the ''true'' price.

They also warned that high spectrum costs would lead to a 25-30 per cent hike in call rates.

Earlier this week, TRAI had proposed that mobile phone companies that lost their permits after the Supreme Court cancelled licences awarded in the scandal-tainted 2008 sale, as well as incumbents and other new entrants pay a minimum Rs 3,622.18 crore for every unit of 2G spectrum in the upcoming auctions (See: TRAI proposes Rs3,622 crore reserve price for 2G spectrum auction).

This is more than 13 times the amount telecom operators paid in 2008, when former telecom minister A Raja dished out pan-India permits that came bundled with 6.2 MHz of 2G spectrum for a mere Rs1,659 crore. While nine mobile phone companies lost their permits based on the Supreme Court's orders on 2 February (See: SC cancels all 2G licences, orders fresh spectrum auction) , TRAI said that only one company could get back its licence in the upcoming auctions as it restricted the airwaves sale to mere 5 MHz in the 1800 frequency band.