Videocon Telecom shares concerns about TRAI spectrum recommendations

Videocon Telecommunications has shared concerns about TRAI spectrum recommendations announced today. The new norms may not benefit mobile service providers such as MTS India, Uninor, etc.

Arvind Bali, director & CEO, Videocon Telecommunications, said the new spectrum recommendations will benefit established telecom operators and not new mobile service providers like Videocon.

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The reserve price fixed for the November 2012 spectrum auction was wrong and those who bid for spectrum in the said auction have paid prices which are exorbitantly high and would not support their business case.

Videocon Mobile Services was compelled to bid at exorbitant price during the November 2012 auction to ensure continuity of business since more than $2 billion was already sunk into the business.

“There is possibility that the successful bid price of the spectrum in the current auction may not even touch the reserve price of the Nov 2012 auction. In the event of that happening, those who bid in Nov 12, including Videocon Mobile Services will continue to be at a disadvantage and there will never be a level playing field,” said Arvind Bali, director & CEO, Videocon Telecommunications.


The company says TRAI spectrum guidelines are offering incentives to old operators.

“While all over the world, new players are incentivized over existing players to discounted price for spectrum etc, it is unfortunate that the new players in India had to suffer cancellation of license jeopardizing their business and were compelled to bid for spectrum at exorbitantly high prices,” Bali added.

Today’s spectrum recommendations are favorable to the existing players who acquired license prior to 2008, and is penalizing the new players like Videocon, Uninor, MTS India, etc.

“We have already been penalized once, where despite coming out clean, our 2G license in 21 service areas was quashed and we also lost approx 7 million subscribers, needless to say the monetary loss running in tune of $2 billion, and now the spectrum that we recently acquired has already become cheaper,” Bali added.

TRAI recommendation is subject to final approval from the cabinet. If a section of the telecom industry is not happy with the current guidelines, the spectrum auction can delay.

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