Amid tussle over spectrum pricing between the Department of Telecommunication (DoT) and the Telecom Regulatory Authority of India (TRAI), Vodafone India has written to Union Finance Minister P. Chidambaram, offering to pay Rs.4,000 crore at three per cent spectrum usage charges (SUC) for extension of its existing licences for Delhi, Mumbai and Kolkata service areas for 20 years.

 “The existing 900 MHz being used by operators should not be auctioned. Instead, a reasonable price for its extension should be set after mutual discussions,” the country’s second largest mobile operator said in a statement.

 In its letter to Mr. Chidambaram, who also heads the Empowered Group of Ministers (EGoM) on telecom, Vodafone India has noted that “the reserve price of 1800 MHz spectrum (to be auctioned as per the Supreme Court order) as recommended by TRAI was still on the higher side. Further increase in the reserve price of spectrum for Metro and Category A service areas by the Telecom Commission will adversely affect participation in the forthcoming auctions, and could again result in an unsold spectrum scenario, as was the case in November 2012 and March 2013.”

  Vodafone has also said that correcting the existing SUC regime was imperative for any effective spectrum reforms to be implemented. Failing this, all spectrum policy reforms being considered by the government, like merger and acquisition norms, spectrum sharing and trading, will not succeed. Vodafone has also supported the TRAI recommendation’s that the government take an in-principle decision to allow spectrum trading and announce this prior to commencement of the forthcoming auctions, preferably as part of the auction notice inviting applications.

  Beginning 2014, all major licenses will come up for renewal, and Vodafone India’s three licences—Delhi, Kolkata and Mumbai—are due to expire next year. The Centre has decided that all companies whose licences are expiring would have to buy spectrum afresh.

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