Uninor approaches Supreme Court over TRAI’s recommendations on the Auction of Spectrum

The telecom industry continues to express its concerns over the Telecom Regulatory Authority of India?s (TRAI) recommendations on the Auction of Spectrum.

Prior to this, it was reported that the top executives of Bharti Airtel, Vodafone India, Uninor, Videocon and Idea Cellular had written to Kapil Sibal, Minister of Communications and IT in this context.

It is believed that the correspondence asked the Minister to permit the auctioning of spectrum in the 1800 MHz band and the reserve price be reduced by 80 per cent. The operators also reportedly stated that the suggested price of spectrum may lead to a 25-30 per cent increase in call tariffs and that the suggested reserve price for the other bands was quite high and unrealistic.

Another point of contention was TRAI?s suggestion to redistribute spectrum in the 900 MHz band, on grounds that the regulator had not examined the various aspects of this proposal before framing its recommendation. Also, they said that this step may lead to fall in the quality of services and an increase in the price of providing these services.

Thereafter, Telenor had said that it will exit the sector if the regulator?s recommendations are accepted by the government. In fact, it was reportedly taking a write-down on its remaining Indian assets valued at 3.9 billion Norwegian crowns.

Now, the operator?s Indian joint venture, Uninor, has reportedly taken up this issue with the Supreme Court, say news reports.

The company is of the view that TRAI?s recommendations are not at par with the Supreme Court?s verdict in the 2G case, where it cancelled 122 licences and asked TRAI to chalk out a framework for a new auction.

Uninor has said that the Court?s order implied that licences had to be auctioned, which meant that the incumbents already holding a licence could not participate.

However, TRAI has recommended that the auction be open to all players. Another point of contention for the company was the base price suggested by TRAI and limiting the auction to 5 MHz of spectrum in the 1800 Mhz band

This is the band Uninor operates in. the company has said that the base price, if approved, would not permit it to participate in the auction, as it was very restricting. Also, the quantum of spectrum put up for auction would create ?an artificial scarcity? of spectrum.

The operator also said that the proposed recommendations were inclined towards the incumbents and new players would be outbid.