All operators and potential new entrants should be allowed to participate in the auction of 2G band spectrum to ensure its efficient allocation and discovery of a fair market price, a Vodafone India submission to TRAI has said.
This is part of the TRAI pre-consultation on “Allocation of Spectrum in the 2G band in 22 services areas by auction”.
Limiting the auction to only the parties which acquired the spectrum in 2008 would create artificial restriction and lead to an outcome of an administered price regime, the submission said.
The company said it recognises the principle that spectrum caps can help to ensure that the resource does not get concentrated in the hands of a few operators. But excessive fragmentation would reduce the value of spectrum, and an appropriate cap would be 25 per cent of the total spectrum assigned in the GSM/CDMA bands, it said.
The current system of escalating charges based on the total quantity of spectrum means that new entrants would pay significantly less per unit of spectrum than existing operators. This would lead to lower bids from existing operators which will negatively influence prices and auction efficiency, it said.
All available spectrum, both retuned and un-allocated, should be made available, Vodafone suggested.
And the auction must meet the principles as enunciated by the Supreme Court, said Vodafone.
The reserve prices should not deter potential new entrants but should be set only to deter frivolous bidders. Independent advisors should be appointed for auction design and conduct, said Vodafone.
The choice of technology should be left to the operators as they will decide which is best suited to meet customer demands. Finally, auction winners should be allowed to swap lots to get continuous blocks of spectrum, the submission said.