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Journalism of Courage
Confusion over policy,shifting deadlines 2G auction couldnt get a worse advertisement
Norwegian telecom major Telenor on Monday announced it was writing off its assets in India worth over 680 million claiming that uncertainty has increased significantly in the wake of the Supreme Courts ruling in February scrapping its spectrum licences and the recent TRAI recommendations on re-auction of 2G spectrum. Telenor,along with Russian firm Sistema and UAEs Etisalat,are among global operators who have taken a hit on their balance sheets due to their exposure to India. Australias Telstra and Swedens TeliaSonera AB are said to have announced they wont participate in the auction. But alarm bells are still not ringing loud enough. Surprising,considering that the telecom sector is one of the few genuine success stories of the opening up of the Indian economy with the surge in subscriber base numbers and teledensity. There is no denying that the telecom boom largely happened thanks to a stable policy environment that spurred competition in private sector players,which translated into competitive tariffs for consumers so that the benefits of telephony trickled right to the bottom of the pyramid. All this could now come undone.
On pricing,there is confusion,too. TRAI has come out with proposals for the 2G spectrum auctions that entail a 13-fold increase in the base price. High reserve prices and spectrum sold in small tranches could ensure the playing field tilts in favour of incumbents and against new entrants. Now to add to the confusion,the Telecom Commission the highest policy-making body in the sector has said that it plans to seek clarity from TRAI on key recommendations. With the retrospective IT Act amendments on Vodafone threatening to further queer the pitch,there is a real risk of frittering away the gains that could have been achieved with cheap connectivity in what was once Indias shining sunrise sector.
