Temasek, Sena approach PM on spectrum

Foreign investors and even political parties have now joined the debate on spectrum allocation.

While Temasek Holdings, the international private equity company that holds a minority stake in Bharti Airtel, has sent a letter to Prime Minister Manmohan Singh raising concerns on the imbroglio and its adverse impact on foreign investment, support for open auctioning has also come from the Shiv Sena.

Some key foreign investors in the telecom space are also seeking legal opinion, saying that the alleged flip-flop in the spectrum policy is a violation of the WTO norms on level playing field, with some of the players even contemplating taking the matter to the forum for redressal.

In his letter, Temasek Holdings executive director and chief executive Ho Ching says the PM should direct the telecom regulator (Trai) to follow the international best practice and strategies while deciding on spectrum allocation.

Spectrum are the radio frequencies that enable the mobile companies to operate their services across a geographic region.

"It is the prerogative of the regulatory authorities to decide on spectrum allocation. However, the latest proposals risk making private operators sub-scale ...As a long term investor in India, it is my sincere suggestion that you invite your regulator to consider best practice...," Ching said in his letter written to Singh.

The Temasek chief also offers to help the Indian authorities interact with other international telecom regulators. "We also believe that the private sector players are a rich source of market knowledge. An open dialogue with these excellent operators should help develop consensus which would be advantageous to India's interest," Ching says in his letter.

The Shiv Sena Parliamentary Party has written to the PM supporting auctioning of spectrum, which would bring in Rs 40,000 crore or more to the public exchequer.

"This amount will go a long way to implement schemes for poverty alleviation and public services, including infrastructure," said the letter from Shiv Sena, signed by former Union Minister Manohar Joshi, leader of the Shiv Sena in the Rajya Sabha.

DoT insiders are, however, dismissive of the spate of letters and feel this is part of the campaign by GSM mobile operators to delay and prevent the entry of fresh competition.

They also pointed out that the letter by the Shiv Sena, a former constituent of the previous NDA government, was a bit surprising as most spectrum and license allocations had occurred during its tenure.

On the suggestion for an auction, the sources added that while the government had lowered the licence fees and other charges in order to make services more affordable, some GSM players were now lobbying for the cost to be increased through an auction and consequently prepare the ground for future tariff hikes.