The Hindu Business Line : Bharti offers Rs 2,650 cr for pan-India GSM spectrum

New Delhi, Dec. 10 With the Ministry of Communications in no mood to relax the subscriber-linked spectrum allocation criteria any further, GSM operator Bharti Airtel on Monday fired a fresh salvo and told the Government that it was willing to participate in an auction.

The company has offered Rs 2,650 crore as the initial bid amount for 4.4 Mhz of pan-India GSM spectrum. This amount is Rs 1,000 crore higher than what the Government has asked Reliance Communication to pay for country-wide GSM licence. Industry sources indicated that other GSM operators and new players in favour of auction may put in counter bids over the next few days, which could force the Government to take a re-look at the option to auction spectrum instead of allocating it based on the number of subscribers.

In a letter to the Department of Telecommunications, Mr Akhil Gupta, Joint Managing Director, Bharti Group, said, “Considering the urgency of the matter for us to attend to the quality of network needs of the customers and the massive future growth, we herewith offer a sum of Rs 2,650 crore. Furthermore, we would like to reserve the right to increase this bid in the event of an auction for such a pan-Indian GSM spectrum allocation and further this may be taken as our initial bid for the pan-India spectrum.”

The move from Bharti comes after all negotiations between the industry and the Government over the last two months to arrive at a resolution to the spectrum allocation criteria failed. The Ministry of Communication had offered to accept subscriber allocation norms specified by the regulator instead of the higher numbers suggested by the DoT; but it was rejected by Bharti as it would not result in any additional spectrum immediately for existing GSM operators.

“We are disappointed at the outcome so far where one can only conclude that there is a continuous move towards unjustifiably tightening the subscriber allocation criteria for the existing GSM operators. Considering the developments, it seems apparent that a satisfactory outcome of the process underway seems unlikely and the issue is headed for a possible lengthy litigation,” Mr Gupta said in the letter.

RCom response

However, Reliance Communications, which is in line to get GSM spectrum ahead of the existing players, termed it as a ploy on the part of Bharti to prevent competition. RCom said that Bharti was confusing issues. “This tantamount to a second GSM licence for Bharti, which is not permissible under law,” said an RCom spokesperson.

Explaining the rationale for the bid, Mr Gupta said, “Since the only plausible justification for the decision to allocate GSM spectrum to CDMA operators seems to be the additional amount that is being charged, we are left with no option but to follow the same practice, albeit at a more realistic amount than what has been currently proposed.” He, however, said that the offer should not be seen as a dilution of the legal process and the company will continue to seek justice in getting spectrum under the current policy. “I would like to state that our above offer is a confirmed offer and that the same is being made without prejudice to all our legal rights under the current policy which entitles us to additional spectrum on our current licences,” Mr Gupta said.

The Communication Ministry had earlier ruled out auction on the grounds that it would be unfair to the new players. DoT officials said that GSM players such as Bharti have until now got spectrum up to 10 Mhz almost free of charge and it would be illegal if the Government asked the new entrants to pay for spectrum as determined through an auction. New applicants have sent legal notices to DoT asking for letter of intent for a licence.

Tata Tele plea

Meanwhile, complicating the matter further, Tata Teleservices has filed a fresh petition in the Telecom Dispute Settlement Appellate Tribunal on Monday, contesting higher spectrum for GSM operators compared to CDMA operators. Tata Teleservices has also sought a direction that GSM operators should be asked to surrender spectrum beyond 6.2 Mhz as CDMA operators get only 5 Mhz despite paying the same entry fees.