New Delhi: Norway’s Telenor ASA will not bid for spectrum in the Mumbai circle unless the minimum price of the airwaves is cut further. It termed the government’s December decision to cut the minimum price for 1,800MHz airwaves as insufficient.
“Telenor Group wishes to clearly state that if the reserve price for 1,800MHz spectrum is not reduced by at least 50%, it will not be able to bid for Mumbai. We now look to the DoT (Department of Telecommunications) and the Hon’ble Supreme Court for an intervention that ensures that the second round of auctions do not also fail,” the company said in a statement on Wednesday.
The Cabinet last month approved a proposal by the empowered group of ministers to cut the reserve price of the spectrum in the circles which did not draw even a single bid in the November auction by 30%. These circles are Delhi, Mumbai, Karnataka and Rajasthan.
Pre-paid tariffs in Mumbai are likely to double if Telenor exits the city, hurting mobile phone users, Telenor said in the statement.
Telenor also expressed concern about the way the government has treated the pricing of 800MHz CDMA spectrum and the 1,800MHz GSM spectrum. The Cabinet had earlier this month cut the reserve price for 800MHz CDMA spectrum by 50% after the auction in November was cancelled as there were no bidders for the airwaves.
The government now expects to auction the spectrum in March.
The government was able to raise less than Rs.10,000 crore, or a third of the Rs.30,000 crore it expected from the sale of airwaves in November.
The Cellular Operators Association of India (COAI), a lobby group that represents operators that provide services using the GSM technology standard, urged the government on Wednesday to “reconsider the unsustainable prices of the spectrum offered for the upcoming auction”.
In a letter to communications minister Kapil Sibal, COAI said the current prices proposed by the government for 1,800MHz and 900MHz spectrum, would only lead to “coercive participation” in the March auction.
“The government has recognized that a high reserve price is the key detrimental factor when revising the reserve price for CDMA operators by 50%. COAI believes that a similar revision for GSM operators is warranted,” it said in a statement.
Terming the spectrum pricing as arbitrary and discriminatory, COAI said that there was a stronger case to give a bigger discount to 1,800MHz spectrum than for 800Mhz spectrum.
“It is distressing to note that the rationale of CDMA, being a ‘dying technology’, is being used as an argument to reduce reserve price for 800MHz spectrum. There should be parity between 800MHz and 900MHz pricing for reserve price by reducing the same for 900MHz to equal that of 800MHz spectrum,” the statement said.