Russian conglomerate Sistema today warned that it will pull out of India if telecom regulator Trai's proposals on spectrum auction are accepted by government in their present form, saying the base price for air wave auction should be kept at Rs 1,658 crore.
"If the government just rubber stamps everything (recommended by Telecom Regulatory Authority of India) then we will pull out from India," Sistema JSFC's Member of Executive Board Andrey Terebenin told PTI.
Sistema JSFC is the majority stakeholder in Sistema Shyam Teleservices (SSTL) which operates under brand MTS brand name in India. The company's 21 telecom licences were among 122 cancelled by Supreme Court in February this year.
The 2G telecom licenses are valid till September 7 and the company would need to buy spectrum through the auction that is due before August 31 as per Supreme Court order.
Trai has recommended a base price of Rs 3,622 crore per megahertz (MHz) pan-India spectrum for 1800 Mhz band, 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 has said that the government can fix a base or reserve price for spectrum in 800 Mhz band at 1.3 times the 1800 MHz reserve price. MTS is a CDMA operator and uses spectrum in 800 Mhz band.
Terebenin said that the modification does not add value to the previous recommendation and said that there reserve price should be reasonable to start the auction.
"The reserve price should back the business model. Keep the same price same at which we entered... Around Rs 1,658 crore. Let market decide the final price," he added said.
He said that Sistema has been pumping money in India for investment locally and hence government need to take call whether it want 'quick money' in short term or achieve goal of providing access of telecom service to people in India at affordable price in the long run.
"It is not a technical issue. Indian government needs to take socio-economic/ political call on the whole issue," he said.