Aditya Birla Group telecom company Idea Cellular on Monday said the Telecom Regulatory Authority of India (Trai)’s recommendations on spectrum re-auction were in “gross violation of the Supreme Court order cancelling 122 telecom licences” granted in 2008.
While acknowledging the telecom ministry was yet to issue guidelines for the auction, the company felt with time running out, it was important for it to place its observations with Trai. Idea Cellular, which lost nine of its licences as part of the order, wrote a letter to the Trai chairman and its members, saying the February 2 Supreme Court order mandated some basic legal features for the re-auction of licences.
A letter, written by Managing Director Himanshu Kapania, referred to Trai recommendations on the limited slots on auction, fixed a huge reserve price, and suggested re-farming or re-distribution of spectrum. “The order does not lend itself to mutilation by any reduction from 122, in the number of licences to be auctioned. Equally, the order does not lend itself to diversion of the spectrum attached to the quashed 122 licences to any one, other than the new licence auction winners,” said the letter, reviewed by Business Standard.
The company did not respond to queries on the letter.
The letter added the reserve price should be the one paid in 2008, Rs 1,658 crore along with notional interest for the intervening period. Trai had recommended a reserve price of Rs 3,622 crore. “Anything lower would confer a potential benefit to the winner not intended by the order. Equally, anything higher would inflict a potential penalty not intended by the order, quite apart from vitiating true price discovery,” said Idea.
It added spectrum attached to the quashed licences could not be diverted to older licencees in the same circle, who were ineligible for a new licence. “What have been quashed are licences (with subsequent allocation of spectrum). What are directed to be granted by auction are licences (with spectrum). Any changes to these basic features of the auction would not merely trespass rights and obligations, they would subvert and violate the Supreme Court order,” Idea said.