“World over, spectrum is owned by the sovereign and it is parted with for a price. The nature of the price may be different, but some telecom players would be happiest if I give it to them for free,” quips Telecom & Information Technology Minister Ravi Shankar Prasad.

Having successfully completed the spectrum auctions, Prasad said Sanchar Bhawan (which houses the Telecom Ministry) was in the news for all the wrong reasons over the last few years, and the first thing he had to do was to bring a ‘sense of hope’ and inculcate good governance.

In an interview with BusinessLine , Prasad touched on what comes next, his views on Nokia and Vodafone, and the controversial 2G (second generation spectrum) case. Edited excerpts:

Companies that did not participate or remained unsuccessful say the bids were inflated. What’s your take?

World over, spectrum is owned by the sovereign and it is parted with at a cost, which could vary. The auction architecture should be fair and transparent and we had appointed a reputed auctioneer, while the government was at an arm’s length. The only information available with the government was the amount garnered daily. The auctions closed only after the auctioneer said bids had stopped. Therefore, I don’t think there is anything to talk about in this. All the major players participated, and very soon we are going to finalise the spectrum trading and spectrum sharing norms.

Not all spectrum put on offer was sold. What about the leftover spectrum?

The auctions have just ended. We have to do allocation and recovery of amount in the manner laid down. Trading and sharing norms will follow. Now, I would like to have a proper review of the quantum of spectrum availability. And, my take is whatever spectrum is available, must be liberalised and made available for all.

I see a data explosion in the country. Therefore, I need to consider the entire availability of spectrum and then take a structured view. The reason why we went expeditiously for this auction was that in many cases the licences were going to expire and needed to be renewed. Therefore, I could not create a situation of uncertainty or ambiguity.

What do you mean by spectrum review?

The review is across the sectors — Department of Information & Broadcasting, Doordarshan, FM Radio and Defence all have spectrum. The Defence band has already been identified by the Cabinet. Now, swapping and harmonisation are going to be done. Therefore, it is important that we take a holistic view of the existing quantity of spectrum, what use it could be put to, and what is the road ahead.

Cellular operators have disputed the government figure on tariff hikes following the auctions. Your take?

I do not want a debate with them. What I have is an objective observation. We have 97 crore plus mobile phones in the country and as per TRAI estimates a consumer uses at best average 350 minutes of talk time per month.

So 97 crore multiplied by 350 minutes into 12 months is the talk time and you divide it with ₹5,300 crore (₹1.10 lakh crore spectrum fee for 20 years). The total roll-over revenue of telephony is ₹2 lakh crore. Therefore, the yearly load is going to be ₹5,300 crore for a 20-year business model. So, it comes to hardly one paisa, which is very objective.

And, by the way that 97 crore is not going to be static and will soon reach 100 crore.

Have you broken the myths surrounding the auctions?

Many of the misgivings which were there in this auction process turned out to be incorrect. Like stating there is spectrum deficit, we put on offer one of the highest quantities. The arguments of the operators that they were participating under compulsion as their licences were expiring, is also not correct — almost 67 per cent was fresh.

So how did you go about it…

We considered their views. Operators had a problem with the earnest money and we reduced it to 11-25 per cent. They wanted prior disclosure of spectrum usage charges, liberalisation of 800 MHz, and more time to firm up their auction strategies, we did all that. And, most importantly we offered 800 MHz, 900 MHz, 1800 MHz and 2100 MHz at one go. Therefore, requisite flexibility was available to all bidders.

Would you bring down the reserve price for future auctions?

There is a committee of secretaries for the purpose of ‘ease of doing businesses’. I want to assure telecom companies that whatever is required will be done in a transparent manner.

What is your message for foreign companies such as Nokia and Vodafone?

Our effort has been to ensure a fair investment regime with a stable policy. In the case of Vodafone, we did not challenge the Bombay High Court order. These are all legacy issues.

In the case of Nokia, the purchaser ditched the Nokia plant and we are also taking the initiative to get a new purchaser. The Tamil Nadu government is active and we are holding meetings with them.

But, let me flag a larger issue — wherever you do business, you have to pay taxes — so why there is an issue here? Issues such as unfair taxation or retrospective taxation we can understand. But, when there is a clear policy regime I don’t think there is an issue.

How do you react to reports about BSNL and MTNL being declared sick by the Heavy Industries Ministry, raising concerns about their closure?

Heavy Industries was asked which companies are sick. We are committed to reviving them. BSNL had a profit of ₹8,000-10,000 crore in 2004. And a decade hence it is making a loss of ₹10,000 crore.

There has to be some degree of accountability.

The nature of investment required to meet their maintenance and growth was not done. But, it is important to note that they also have to improve their own functioning.

Do you still support the CBI stance in the 2G case? (UPA lawyers had opposed it)

My only point is that the CBI has to take a call. They are the prosecutor. If they want they can take any call…no interference.

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