The Government and telecom operators have different views on the upcoming auction of spectrum which in the past has attracted controversy with the Supreme Court cancelling the 2012 auctions.
The industry claims the auction could be bitterly contested and telecom rates could even go up because of two reasons. A section of the industry is claiming shortage of frequency especially in nine telecom circles. According to former Telecom Regulatory Authority of India (TRAI) member DPS Seth, some of the spectrum being offered in the 1800 mhz band is partial while some of the 900 mhz is less than what is required.
The industry also says most of the spectrum is being auctioned because the licence period of existing operators is coming to an end. It will be an unequal battle because incumbents have a subscriber base to defend while the challengers have no such liability at the back of their minds and could push existing companies desperate to win back spectrum to the brink.
But telecom officials contest both claims. One Department of Telecom (DoT) official did not think that additional spectrum could be available in time for the auction by swapping frequency available with security agencies. Past experience has shown that there is a lot of uncertainty about when the security forces will be able to part with the spectrum.
According to another DoT official, the other and simpler reason is that the Government does not feel there is a shortage of spectrum. Last time the entire spectrum on offer was not sold out even though the reserve price was reduced. In fact 78 mhz in the 1800 Mhz band being put up for auction this time was not sold in the previous auction.
They also turn down the argument that existing licence holders may bid aggressively leading to slower roll out in rural and semi urban areas and the possibility of consumers being charged more due to the high upfront cost.
“The same thing happened earlier. Existing licences had come up for re-bidding and there was no new bidder in at least three major circles. We don’t know whether this was due to market fluctuation or something else in between. Let us see what this happens this time but there is no shortage of spectrum according to us,’’ said the official.
The auctions are scheduled for February next year but the Telecom Regulatory Authority of India as well as companies interested in snapping up frequencies are already off the blocks.
