Vodafone wants 2G auctions to be open to all players

Vodafone India today said asked the telecom regulator to allow them to participate in the 2G spectrum auctions, which might be held by the government. The company said that the auctions should be open to all the existing operators.

These comments were made by the company after Trai sought response on pre-consultation on 2G spectrum allocations by auctions. A recent move by the Supreme Court cancelling 122 licences issued in 2008, and asking them to re-allocate by auctions like in 3G has triggered this move.

Vodafone however feels that this auction should not be restricted only to those eight companies, whose licences were cancelled by the courts. The operator said that many companies have been deprived of spectrum since 2006, and have been adding hundreds of millions of new mobile users.

“A fair market price cannot be determined if the opportunity is denied to the needful and the worthy. If auction is not open to all eligible players, then such auction may deprive more worthy or more efficient players who give more value to spectrum to even participate leading to inefficiencies in its utilisation,” Vodafone said.

Vodafone also asked the government to disclose the amount of the available spectrum, as a part of free and transparent auction. The spectrum which will be available even the 2008 licence cancellation was also sought to be disclosed.

The company also sought a review of the annual spectrum usage charges. At present, additional fee for incremental spectrum is collected by way of an escalating revenue share for higher slabs of spectrum. If the spectrum were to be auctioned, an upfront fee will be collected as auction proceeds.

“Continuing with the current approach of applying a higher spectrum usage charge on additional allocations would lead to anomolies. An auction with escalating spectrum usage charges would skew the auction in favour of precisely those companies which bring the least economic benefit,” the company said.