Competition Commission chief for spectrum auction

New Delhi, Dec 30 | Updated: Dec 31 2007, 05:28am hrs
GSM mobile operators have found support from the Competition Commission of India which said that competitive bidding was the right method of allocating scarce spectrum to telecom services providers.

In India, competitive bidding is used in case of oil and gas blocks, coal blocks and concessions for development of highways and airports and other assets. So, why not spectrum," CCI acting chairman Vinod Dhall said, disagreeing with the governments announcement ruling out the auction of spectrum. As regards the legal commitment of spectrum toward existing players, the CCI chief said that such commitments could be fulfilled by the government at a price to be discovered through competitive bidding combined with some other modes.

Communications minister A Raja had recently said that auctioning of spectrum would not stand legal scrutiny and any such decision would create a level-playing field in favour of existing players as they have the airwaves at the existing price of Rs 1,651 crore for a pan-India spectrum.

The department of telecom (DoT) is also of the view that the objective of government still has not changed from increasing penetration of service and affordability and rise in the spectrum prices would lead to higher tariffs and that would not be acceptable. Brushing aside the speculation that under the competitive bidding new players will stand no chance, he said, serious participants will have every possibility of winning if they are aggressive and efficient enough. The process of spectrum auction should be the same as in other fields, Dhall said, adding that "stronger parties are bound to have an advantage over the others". The commission chief further said that spectrum auction through a competitive bidding process would lead to the real price discovery for the spectrum. The telecom sector is facing controversy over allocation of 2G spectrum with established telecom operators favouring auction and the new players suggesting that it should be provided through an administrative decision and at the same price at which it was given to existing players 11 months ago.