I was always of the Opinion that the BJP Government headed by Narendra Modi meant strict Governance & Business. However, the Telecom Spectrum Auction Design appears to be flawed and now I’m beginning to wonder if the Honorable Supreme Court Justice sensed the flaw and potential vested interests and passed an order to DoT that Auction results shall not be declared without the consent of the Apex court.
So what is the Flaw in Spectrum Auction Design ?
On Day 8 of the Auction, increment in 900MHz bid price was in the range of 1-30% across circles – Assam, North East and West Bengal. Reliance Communications is operating in all these circles and loss of 900 Mhz Spectrum for RCom in these circles could lead to scrutiny from the Supreme Court as there is no back-up 1800 spectrum [for running
2G] in Assam and WB circles, while North-East has already been marked by the Judiciary as a problem area. You must note that, 900 Mhz bid premium in RCom renewal circles is the highest at 107% over the Reserve Price, compared with 75%/75%/85% premium in Airtel/Idea/Vodafone circles.
Guaranteed shut down of a 2G 900 MHz network in NE circle (Airtel or RCOM’s) is a well-known flaw, already recognized by the Courts. Lack of any or sufficient fall back 1800 spectrum to continue 2G service is another flaw—this is coming to the fore now, as RCOM is cornered in a must-win 900 situation in Assam / WB circles. The latter also encourages predatory behavior from financially strong telcos.
In order to maximize revenue, the DoT officials appear to have lost sigh about consumer services. It is too late for any backdoor negotiations either and without clear rodamap for the sector, which I have been stressing for years, Telecom Service Providers will sail turbulent waters no matter which Government is in Power.