Russian conglomerate Sistema JSFC has written to Prime Minister Manmohan Singh alleging the Telecom Regulatory Authority of India’s (Trai)’s recommendation of fixing the reserve price for CDMA spectrum at twice as high as the price for GSM airwaves was “targeted” towards its joint venture company Sistema Shyam TeleServices (SSTL).
In the letter written to the PM last month, Sistema Chairman Vladimir Evtushenkov had said the measure of having a higher reserve price for CDMA spectrum “seems to be particularly targeted at SSTL, which is the only pure play CDMA player in the country.”
Demanding a lower reserve price for his Indian venture, Evtushenkov said the acceptance of various recommendations of Trai “would irreversibly tilt the already skewed playing field in favour of the incumbents. In effect, it would force the new operators (such as Sistema Shyam) to exit the Indian market, leaving the incumbents in a monopolistic position, with serious consequences for Indian consumers and the economic development of the country”.
Trai had recommended a base price of Rs 3,622 crore per megahertz (MHz) pan-India spectrum for the 1,800-Mhz band (used for GSM service), which is almost 10 times higher than the price at which 2G licences, bundled with 4.4-MHz spectrum, were allocated in 2008 by then telecom minister A Raja.
The regulator had also recommended that price of spectrum in the 800-MHz and 900-MHz bands (used by CDMA players), should be double the price of the 1,800-MHz band.
However, later Trai had agreed to fix the Reserve price of the 800-MHz spectrum at 1.3 times the 1,800-MHz reserve price, where 5-MHz spectrum was not available.
He also alleged, “Trai appears to have exceeded the mandate of the Supreme Court (which had directed Trai to frame recommendations after the auction of the 2G spectrum was cancelled as a result of the February 2 verdict) by recommending arbitrarily high reserve prices."
Sistema Shyam’s 21 telecom licences are among the 122 cancelled by the Supreme Court order dated 2 February. SSTL has 16 million subscribers in India.
Evtushenkov also alleged the government was initiating steps that benefit existing telecom operators, which may result in the exit of new entrants.
Evtushenkov said the proposal to waive all payments for spectrum held by them (incumbent operators), despite the telecom commission having decided to charge for the same was like offering “bailout packages to the incumbents.”
He also said decisions on fresh spectrum allocation should be expedited as “time is fast running out, and no viable solution for protecting our investments and helping to minimise our losses is in sight”.
