After spending Rs 2,031 crore, Idea wants to gain from any cut in fee for unsold spectrum

Telecom Lead India: After spending Rs 2,031 crore for 2G spectrum, Idea Cellular wants to gain from any cut in spectrum fee for unsold spectrum that will be sold before March 2013.

Idea Cellular has filed an affidavit with the Supreme Court saying that any reduction in the reserve price for unsold spectrum should also be applicable to winners of the recently concluded auction, according to a report in HinduBusinessLine on Friday.

Recently, the government said the EGoM may meet to discuss lowering of spectrum fee for unsold spectrum in circles like Rajasthan, Delhi, Mumbai, etc. This is primarily aimed at getting back operators to bid for more circles and achieve its target of Rs 40,000 crore. In the November 11-13 auction, the government could mobilize Rs 9400 crore.

If the government accepts Idea Cellular’s plea, it will further bring down the government’s mobilized amount. But it will be good for the telecom sector. Most of the analysts have already said the flopped telecom spectrum auction was for good for the sector.

“In the event further quashed/unsold spectrum from current auction is made available/put up for auction in the 1,800 Mhz band and any decision is made which results in a reduction in the reserve price or the final winning price, the petitioner (Idea Cellular) should be entitled to the benefit of the same,” the affidavit filed by the mobile company said.

Idea Cellular had won spectrum in seven circles by paying Rs 2,031 crore at the recently concluded auction. But the Government did not receive bids for all spectrum put on the block. This has prompted the Government to look at the possibility of holding another round of auction before March next.

Communications and IT Minister Kapil Sibal recently said that the Government will review the base price after analysts and bidders complained that it was too high. Analysts had also criticized the Government’s decision to sell only a part of the spectrum freed up after cancelling 122 licences issued in 2008.

Aditya Birla Group company Idea Cellular had earlier filed an appeal with the apex court that the Government was not following its (the court’s) orders by holding back spectrum. The company said that the additional affidavit was to ensure level playing field as it cannot be put to any commercial disadvantage in any manner due to the Government’s non-compliance of the court’s order.

Bharti Airtel, Vodafone and Idea Cellular plan to write to the Indian Government saying that the unsold spectrum in the CDMA band should be combined with the 900 Mhz spectrum. The three companies will tell the Government that all spectrum available with the Government should be put for sale as that will allow the operators to decide which frequency band they want to buy and which one they want to give up.

Combining CDMA spectrum (which is in the upper part of the 800 Mhz band) with the 900 Mhz band will enable the GSM players to get a larger chunk at the time of re-farming.

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