Telenor demands reduction in rates for upcoming GSM spectrum auction
Company behind Uninor warns of poor showing in March auctions if base prices remain at current levels.
Norwegian telecom giant Telenor has written a letter to the Ministries of Telecom and Finance asking that the base prices in the upcoming GSM spectrum auction, be slashed. Telenor, who is providing services in India through the Uninor brand has stated that it would be “almost impossible” to participate in the auction at the current prices.
The Economic Times reports that Telenor has asked the Government to offer discounts similar to the ones provided for the CDMA spectrum auction in November. The Government had earlier reduced the prices for the CDMA auction by 50% and had reduced the GSM auction prices by 30 percent after poor response from telecom operators during the GSM auctions held in November. The Government had set the base price at Rs. 14,000 crores for 5MHz, for the November auctions, a price that was considered to be too high by most telecom operators especially for the Delhi, Mumbai, Rajasthan and Karnataka circles.
Executive Vice-President and Head of Asia Operations for Telenor, Sigve Brekke also mentioned in his letter to the Government that the high base price for the GSM spectrum would result in a market monopolized by the big telecom companies, and higher costs for individual users.
The Supreme Court, in February of last year, had dissolved 22 permits allocated to Telenor by ex-Telecom Minister, A. Raja, who was subsequently jailed on charges of corruption in the 2008 GSM auctions. Telenor managed to successfully bid for licenses in six circles in the November auction and was now expected to participate in the upcoming GSM auctions to acquire more licenses.
Sources: The Economic Times, First Post