Spectrum issue lifeblood of 'mobile' services: Vodafone

Company suggests method of market price discovery via indexing historic market prices inappropriate

Vodafone India today said that government should put up all the spectrum quashed by the Supreme Court in 2011, for auction. Any move otherwise, the second largest telecom operator said, would be a discrepancy.

The spectrum issue, which Vodafone calls 'the lifeblood of mobile services' should have affordability as the foremost objective of the telecom policy. The company made these comments in response of the consultation paper put up by the telecom regulator TRAI, on valuation and reserve price of spectrum. IT also said that the telecom policy of the country should have the foremost objective of affordability.

“Moreover, reserve prices recommended should encourage purchase of all spectrum because unsold or idle spectrum is a valuable socio-economic resource lost to the nation forever. GDP-data-derived estimates suggest that, from the quantum of unsold or idle spectrum, India could be losing benefits worth more than hundreds of thousands of crores per annum – something it can ill afford,” Vodafone said, in a press release.

The company suggested that the method of market price discovery via indexing historic market prices is inappropriate. The two historic market prices available for spectrum pricing was in 2001 as well as 2010.

“Expectations about the future, on which historic prices are based, change over time. As TRAI itself rightly notes, there has been a significant downswing in the market since 2010,” Vodafone claims.

Vodafone also said that it supports spectrum trading. “Tis is an important tool to ensure spectrum is used productively and efficiently and also facilitates consolidation. Spectrum trading has been successfully introduced in numerous countries,” the company said.

The company suggested that TRAI could recommend the introduction of spectrum trading, and consult stakeholders on spectrum trading modalities. “In line with global practices, more liberal M&A norms and spectrum sharing norms would also benefit all stakeholders,” Vodafone said.