Spectrum auction policy 'fiscally myopic', Reliance Telecom tells SC

 New Delhi, April 28: Telecom major Reliance Telecom told the Supreme Court on Tuesday that auction of spectrum based on “irratiol” tender conditions may meet the government’s goal of higher revenue but is not in conformity with the overall objective of public policy. “The auction may meet the government’s need for higher revenue collection and bleed the industry which is recovery mode but it was certainly not in conformity with the overall objective of public policy involving the government revenue, consumer use and the viability of the industry,” senior counsel P. Chidambram told a bench of Justice Dipak Misra and Justice Prafulla C. Pant.

Appearing for Reliance Telecom, a subsidiary of the Anil Dhirubhai Ambani Group, Chidambram assailed the tender conditions at the level of micro-classification, saying that it presented an uneven playing field to existing telecom operators and new entrants which also included those whose licences would be coming to an end by the ends of the current year.

Taking the court through about half a dozen micro-classifications in different band-width, Chidambram. pointing to the glaring mismatch, said that if any existing telecom service provider (TSP) makes bid for 1.25 MHz of spectrum in a particular band, then the new entrant will have to make bid for five MHz to enter the bidding process.

He said that in certain cases, the new entrant will have to make bids that are 8.5 times more than the bid made by the existing TSP.

Describing the micro-classification as “irratiol and having no nexus to the objective sought to be achieved”, Chidambaram said that in a situation of spectrum being in the supply constraint, the prices will be artificially jacked as existing TSPs would not only be competing among themselves but with new entrants as well.

Describing the government policy as “fiscally myopic” and “selective” in accepting the “convenient” recommendations by telecom regulator TRAI, he said that revenue gain would be more to the government but the loans by the fincial institution would get converted into NPAs. (IANS)

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