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Mr Kumar Mangalam Birla

Thomas K. Thomas

New Delhi, Sept. 22 Mr Kumar Mangalam Birla, Chairman, Idea Cellular, has written to the Home Minister, Mr P. Chidambaram, that the Government should first finalise the allocation policy for 2G spectrum before auctioning radio waves for 3G mobile services.

In a letter, Mr Birla said, “It appears that the auction of 2100 Mhz spectrum is being sequenced first, even as the larger spectrum policy is not just in suspension, but major and game-changing proposals are under advanced deliberation. This is worse than placing the cart before the horse. It amounts to asking bidders to participate blind. Further, once the spectrum committee report-based policy emerges after the auction, it will inescapably raise cries of arbitrariness and probity.”

The Birla Group holds the majority stake in Idea Cellular, the fifth largest mobile operators in the country.

Mr Birla said that this has led to an anomalous situation where two parts of the Government are independently dealing with spectrum issues that are umbilically linked and logically sequenced.

“This avoidable problem is easily remediable by quickly first finalising the policy derived from the report and sequencing auctions immediately thereafter. This is the logical and only sequence that should be followed,” he added.

The Cellular Operators Association of India, which represents all the GSM operators, had also written a similar letter to the Government.

The primary concern is that the operators want to put a value to the 3G spectrum based on the allocation criteria for 2G radio frequency.

The spectrum committee on 2G had suggested wide-ranging reforms, including doing away with the existing subscriber-linked criteria, and allocation of spectrum through auctions. It had also suggested de-linking 2G spectrum from telecom licence. All these issues are being considered by the telecom regulator which has sought time till November. By the time the DoT decides the policy it could be early next year. At the same time, 3G auctions are scheduled for December 7.

For example, a decision on de-linking spectrum from licences will have a major ramification on 3G auction. If the Government de-links the two, then new players will be able to take a vanilla licence without 2G spectrum and then bid for 3G. Otherwise, new players will have to pay Rs 1,650 crore just to participate in 3G auction, which will make it unattractive.

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