Apr 30, 2012 06:38 PM IST | Source: CNBC-TV18

Clarifications sought on reserve price fixed: Telecom Secy

The telecom commission is seeking clarity on issues related to 2G spectrum auction including auction reserve price. The proposals of the telecom regulator have been severely criticised by service providers like Bharti, Vodafone, Idea and Uninor.

The telecom commission is seeking clarity on issues related to 2G spectrum auction including auction reserve price. The proposals of the telecom regulator have been severely criticised by service providers like Bharti, Vodafone, Idea and Uninor.

Below is the edited transcript of R Chandrashekar, telecom secretary
interview to CNBC-TV18. Also watch the accompanying video.

Q: What are the issues on which the Telecom Commission has sought clarity from the telecom regulator?

A: The Telecom Commission needed additional information or clarity on many issues.

Firstly, The number of slots to be put up for the auction? The TRAI recommended one slot of 5 megahertz for the auction. The commission wants to understand why the TRAI has suggested that only one slot be auctioned even if more spectrum is available.

Secondly, question on the quantum of spectrum, which has been suggested to be kept aside for refarming? Whether all the refarming has to be done at the same time? Or there are other ways of optimizing it. Whether the entire spectrum needs to kept aside now and kept idle till such time that individual licenses expire or it has to be done progressively.

There are questions relating to the pricing of spectrum? Time for relocation of refarmed operators is being proposed? There are a whole set of issues relating to the recommendations with regard to refarming, which have been raised. On modalities there are many points where clarification is necessary.

Thirdly, issues relating to pricing. For example the reserve price, which has been fixed, the assumptions and the basis of that reserve price, the suggestion with regard to the spectrum usage charges, the installment payment plan, which has been suggested and the overall impact of this package in terms of tariffs and revenue.

Also, there have been a number of issues raised by the operators in representations that they made to the government and to the regulator. Points relating to rollout and the eligibility of old and new bidders and the caps and how much of spectrum telecom operators will would be eligible. 

Q: The telecom regulators recommendations had justified a high reserve price on the basis of liberalisation of spectrum. Did the commission find this justification in correct, correct, what were the views?

A: This is not the stage at which the commission would come to a conclusion on whether this is or is not the appropriate reserve price. This is the stage at which we are trying to understand the basis of the TRAI’s recommendation and what exactly were the calculations and assumptions that have been made. It is true that some of the main assumptions and basis are contained in the report but it’s also a fact that certain additional inputs as well as different kinds of analysis have been brought out in some of the representations that have been received. All of these are being further referred to the TRAI for their comments on the points that have been made.

Q: What is the view of the department of telecommunications when it comes to this reserve price issue?

A: The department of telecommunications will have to take a final call on these issues, at a certain point in time. We are not at this stage now.

What we making sure that we have all the necessary inputs and analysis, so that, when we take a final call and make a recommendation on what should be the reserve price, what should be the approach towards the auction or the number of slots or reforming - then all of these inputs are taken into account.

At this stage we are seeking further inputs from the TRAI. Procedurally, it is necessary for the government to actually make a reference to the TRAI on points where additional information is required or there is different view before taking a final decision. Once the TRAI’s final recommendations are out, then we will take a final view.


Q: What is the timeline of all the action taking place? There were reports that the government will seek additional time for concluding the 2G auction. How correct is that as well?

A: Now, that the commission has met and it is clear about what the areas are, which requires further elucidation. We will communicate formally to the TRAI by the May 2. We would expect the final recommendation from the TRAI in 15 days from then. We propose to conduct a meeting of the Telecom Commission shortly thereafter. The final recommendations of the Telecom Commission are proposed to be okayed around mid-May.

Immediately, thereafter the matters would be placed before the Empowered Group of Ministers for a final decision on all these issues and that would set the stage for the actual action process to begin.

In parallel, we have already initiated steps for appointment of the auctioneer and after the meeting of the EGoM tomorrow, there is a preliminary meeting of the Empowered Group of Ministers tomorrow and after that we will proceed with the process for appointment of the auctioneer.

We are doing everything possible to speed up the process and we are speeding up our whole analysis and proceedings. At this stage, I cannot comment on exactly when the process would be completed because there are many imponderables between now and the final conclusion of the auction process.

Q: If there is any no parallel process of approaching the Supreme Court like those media reports had suggested or perhaps telling the Supreme Court, we may not be able to conclude the auction by 31st August that deadline is what you are working with?

A: As of now, we have not made any move to go back to the Supreme Court. We are focusing our entire energy on speeding up the auction process as much as it’s possible.

Q: Is finalising an auctioneer, the only agenda for tomorrow’s meeting?

A: It’s a preliminary meeting. No significant decisions are likely to be sought at this point of time expect for some decisions relating to the process of appointment of an auctioneer.

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