The Hindu Business Line : Global bidding for 3G is okay with Law Ministry

New Delhi, June 12 In what could be good news for foreign telecom companies wanting to invest in India, the Union Ministry of Law and Justice has suggested that the Communication Ministry may take the issue of following an open auction for third generation mobile services to a Group of Ministers if it wanted to overrule the views expressed by the Telecom Regulatory Authority of India.

While the Telecom Regulatory Authority of India has expressed concerns against an open auction on the grounds that existing players were more prepared for 3G mobile services, the Communication Ministry is in favour of inviting bids from international players also.

The Finance Ministry has also backed Communication Ministry on the grounds that an open auction will get more revenues for the Government.

TRAI has, however, told the Government that such a decision cannot be taken legally without considering the views of the regulator.

In order to find a solution to the impasse, the Department of Telecom had sought the views of the Law Ministry.

Legally permissible

Giving its views on the issue the Law Ministry said that it was legally permissible for the Government to allow foreign or new players to participate in the auction process. “As the matter relates to allocation of 3G spectrum, which is very important and sensitive, and there is a divergence of views between TRAI and the Ministry of Communications and & IT, though the recommendation is not binding on the Government….it would be appropriate that in case the Government would like to disagree with the views of the TRAI and propose to allow outsiders to bid in the international bidding, then the matter may be placed before a Group of Ministers so that concerns expressed by TRAI are suitably addressed and overruled.”

The Law Ministry said that though it was up to the DoT to decide on whether it wants to restrict auction for 3G to existing players as suggested by TRAI or open it for international players.

“Both options are legally permissible,” the 18-page legal opinion said.

Separate allocation

Taking on TRAI’s views that 3G licences cannot be issued to foreign players when there are 342 applications awaiting a licence for 2G (existing mobile services), the Law Ministry said that as per the telecom regulator’s own admission, 3G was not a continuation of the existing allocation.

“Hence the pending allocations may not be linked with allocation of 3G spectrum. It would also be incorrect to state that there is a back door entry of any one else as the 3G spectrum is totally separate allocation,” it said.

Opening up the auction for foreign players would benefit companies like AT&T and Etisalat who are looking to foray into the Indian market.