The GSM industry has for long been averse to the idea of bidding for spectrum, but a changing regulatory environment has made India’s largest GSM operator shift stance.

In a letter to the DOT secy D. S. Mathur, Bharti's joint MD Akhil Gupta says that the company is willing to offer Rs 2650 crore for 4.4 mhz of GSM spectrum across all circles. This is the same amount of spectrum that was given to CDMA major RCom for Rs 1650 crores. The price of Rs 1650 crores was discovered through an auction in 2001. But Bharti says it is willing to pay a minimum of Rs 1000 crores over and above the 2001 price. The company says its offer for Rs 2650 crores be treated as an initial bid.

That could well put pressure on the DOT to reconsider its criteria for allocating spectrum.

Minister Raja though has ruled out auctions for 2g spectrum even though he claims to be in favour of it because it is not legally tenable. But that notwithstanding Bharti's move will raise the decibel levels and may be a trigger for a potential bidding war for spectrum. Not surprisingly the opposing CDMA lobby says Bharti's move is an attempt to mislead. RCom issued a statement saying Bharti seems to be pushing for a second license even though its not entitled to it..

The next hearing of this case is slated at the TDSAT on Wednesday and that could well give an indication of how long it will take to restore some balance in the sector.

CNBC-TV18 Disclaimer

This information is source-based and has not been provided to the stock exchanges.