New Delhi: A lobby group of telecom operators has asked the department of telecommunications (DoT) not to favour state-run firms over private firms in the ongoing auction of third generation (3G) and broadband wireless access (BWA) services.
The group has also told DoT that public statements by officials could influence the auction, days after telecom minister A. Raja spoke of expected revenues from the process.
State-run Bharat Sanchar Nigan Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) are not participating in the auction for air waves that allow high-speed voice and data transfer and multimedia services. They were allotted the spectrum a year-and-a-half ago on the condition that they will have to match the winning price of the auction. The two operators have asked DoT to allow them to pay in instalments or defer the payment, Mint reported on 21 April.
Rajan Mathews, director general of the Cellular Operators?Association?of?India?(Coai), protested this in a letter to DoT secretary P.J. Thomas.
“The word match in the clause would imply both in terms of bid amount and the time granted for making the payment,” the letter said. “Any delay in payment on the part of BSNL and MTNL would result in a non-level playing field with the other service providers, and hence, if any extension is granted to BSNL and MTNL, the same should be granted on equal terms to private sector service providers as well.” BSNL and MTNL are members of Coai.
Regulatory expert Mahesh Uppal, director of Com First India Pvt. Ltd, said the exemption from bidding for BSNL and MTNL is questionable. An extension on payment “would compound the mistakes the government has already made,” he added.
In another letter to Thomas, Mathews said it was inappropriate for authorities, agencies and other stakeholders to make public statements about the auction process.
“In the benefit of fair play, it should be the endeavour of all concerned to refrain from making statements, which may impact the bidding behaviour of the participants in the ongoing auctions,” the letter reviewed by Mint said.
On 27 April, Raja had said he expected 3G and BWA auctions to garner between Rs50,000 and Rs55,000 crore, much more than the budgetary estimate of Rs35,000 crore. “There is a general agreement among all the people involved that no one will talk of what happens in the auctions and that everyone should refrain from making any comments that may affect the outcome of the auction,” Mathews said.
Uppal disagreed. “It’s a serious auction where players will do very hard sums, so there should not be any impact from such a move,” he said. “There was little impact from the earlier talking down of the auction (earlier estimates were Rs25,000 crore), or now talking up the earnings.” On Wednesday, the 22nd day of the auction, the price for one all-India slot of 3G spectrum went up to Rs11,047 crore.