Eight cellcos weigh-in for spectrum battle; DoT calls on SC to shut down legal opposition to auction

17 Feb 2015

Eight companies have applied to participate in the upcoming spectrum auction, including disruptive newcomer Reliance Jio Infocomm (RJIL), the Economic Times writes. Conspicuous by its absence was Russian-backed Sistema Shyam TeleServices (SSTL), which has opted to steer clear of the auction, citing dissatisfaction with the high reserve prices and legal issues with the Department of Telecommunications (DoT). The applicants are Vodafone, Bharti Airtel, Idea Cellular and Reliance Communications (RCOM) – all of which must renew expiring licences or risk being forced to close down operations in certain circles – as well as Aircel, Uninor and Tata Teleservices (TTSL). Idea has the most expiring licences with nine, whilst Vodafone and RCOM each have seven and Airtel six.

A statement from SSTL explained its decision to opt out of the auction: ‘SSTL has consistently maintained that the pricing of the 800MHz spectrum at INR36.46 billion (USD585.79 million) is way out of line and does not merit a strong business case for buying additional spectrum in the upcoming auction. The company continues to maintain that such pricing does not take into account the realities of the prevailing ecosystem within the 800MHz band.’

For its part, RJIL is understood to be looking to grab 1800MHz spectrum in the eight circles where it failed to win frequencies in February 2014, namely: Uttar Pradesh East, Uttar Pradesh West, Rajasthan, Haryana, Bihar, Himachal Pradesh, Jammu & Kashmir and Punjab. However, it has also been speculated that RJIL, owned by petrochemical giant Reliance Industries, could also bid for the limited spectrum in the 2100MHz band, or put pressure on the incumbents by competing for the 900MHz spectrum needed by Vodafone, Airtel, Idea Cellular and RCOM to continue operations.

In a related development, the Business Standard writes that the DoT has requested that the Supreme Court rule against any calls for a stay order on the auction. Plans for the upcoming tender have been lambasted by telcos, which have criticised the high reserve prices and artificial scarcity of spectrum created by the government. Airtel, Idea and RCOM are all understood to have launched legal proceedings against the DoT regarding the tender.