Want to buy additional spectrum, invest in India: SSTL

SSTL has said this in a protest letter toTrai against its recommendation that there should be no auction of CDMA airwaves

Sistema Shyam Teleservices Ltd, which offers mobile services under the MTS brand, has informed Trai that it wants to invest in India and participate in spectrum auctions to expand operations across the country.

SSTL has said this in a protest letter to the Telecom Regulatory Authority of India against its recommendation that there should be no auction of CDMA airwaves.

It was only bidder for the CDMA spectrum (800 Mhz band) in the March 2013 auctions and won radiowaves to operate in 8 circles for Rs 3,639 crore.

In the letter, SSTL CEO Dmitry Shukov said: "We have already made USD 3.6 billion long-term investment in India and would need additional spectrum to meet the growing demand from subscribers for better quality services.

"SSTL is committed towards India, and are willing to continue to make investments in India."

Trai has said in its recommendations that there is no demand for the CDMA spectrum, except from SSTL, as was seen in the last auction and one telecom operator had offered to surrender some its airwaves frequency in the CDMA band.

The regulator also said that unlike 1800 Mhz band (2G spectrum), government is not bound by the Supreme Court order to auction CDMA radiowaves, recommending that "the auction in the 800 MHz band should not be carried out now".

Countering the point, Shukov said that there was no demand for even premium 2G spectrum in 900 Mhz band but still Trai has recommended its auction at much lower rate.

"Had reserve price for 800 MHz spectrum band been reasonable, we may have bought more spectrum in 8 circles and participated in auction for remaining 13 circles and continued with Pan India operations," he said in the letter dated September 20.

Trai has recommended up to 62% lower price for 900 Mhz band spectrum compared to last reserve price.

Government is considering auction of certain amount of frequencies in 900 Mhz band which are with telecom companies like Airtel, Vodafone and Loop Mobile in service areas where their licences will expire in the last quarter of 2014.

Shukov has also protested against Trai recommendation to explore opportunity for making part of CDMA spectrum band available for extended GSM services.

"We are perturbed by the Authority's recommendation to cull out significant portion of 800 MHz band to create EGSM band and withhold auction of 800 MHz spectrum band. Our decision to investment in 800 MHz spectrum band was based on current and future availability of spectrum in this band," he said.

SSTL CEO said investments in the telecom sector are long term in nature and need some degree of certainty but Trai's recommendations to change the band plan within months of previous auctions has led to ambiguity which is not conducive to company's expansion plans.

"A clear policy framework without discrimination and equal opportunity to all operators will boost investors' confidence. In this regard, we expect an early spectrum auction at a reasonable reserve price," Shukov said.

The recommendations of Trai for third round of auction have gone to Department of Telecom where an internal panel is studying pros and cons of the report.

The DoT panel is expected to submit its report by September 30 after which it will be placed before inter- ministerial body Telecom Commission which is scheduled to meet on October 3.

Telecom Commission views will be placed before the Empowered Group of Ministers on spectrum, headed by Finance Minister P Chidambaram, for final decision on auction.

The EGoM may refer base price of spectrum for auction to Cabinet for final decision. The next round of auction is expected to be held in January.