In a major set back to GSM operators, Union communications minister A Raja today ruled out auctioning of GSM spectrum so as to maintain a level playing field between existing operators and new entrants. Bharti Airtel and Idea have proposed auctioning of 2G spectrum and have offered initial bids. Reliance and Tata have opposed auctioning of spectrum.“We cannot adopt the auctioning route for existing 2G spectrum due to legal barriers. But for next generation mobile services (3G), the Government has already announced a policy that frequency will be allocated on the basis of auction,” said Raja on the sidelines of the India Telecom 2007 meet organised by FICCI. Earlier, Prime Minister Manmohan Singh stressed the efficient use of spectrum as it is a limited resource. “We must realise that we need to make use of this precious and limited resource optimally. All technological options must be explored to maximise its utilisation,” said Singh. He added that he was aware that spectrum availability can be a constraint for the growth of this sector in future. He said that the policy regime for making spectrum available should be fair, transparent, equitable and forward looking. It should not create entry barriers to newcomers or barriers to the continued growth of the sector. Focusing on the revenue potential of spectrum, Singh said, “The revenue potential to the Government must not be lost sight of. After all, governments across the globe have harnessed substantial revenues while allocating spectrum.” In Europe and the USA, spectrum is auctioned and governments earn substantial amounts. For example, in the USA the reserve price for spectrum in 700 MHz band is $10 billion. Auction will happen next month. In India, spectrum was given free to telecom operators due to strong opposition from the GSM players. All GSM players including Bharti Airtel and Idea brought legal opinions against spectrum whenever the Government wanted to have a debate on this issue. Singh also said that the Government and the regulator should work closely. “In the final analysis, the key issues are correct pricing, fair allocation rules, and a pro-competitive stance. In the past, the department and the regulator have successfully enabled the rapid growth of this sector. I believe that working closely with the independent statutory regulator, we can balance multiple objectives in a fair manner,” the Prime Minister said.ManmohanSpeak• PM stresses efficient use of spectrum as a limited resource• Says Govt must earn substantial revenue from spectrum• Focuses on greater cooperation between Govt and regulator
