In response to TRAI’s consultation paper on ‘Valuation and Reserve Price of Spectrums’, Vodafone India on Wednesday said that the government should put up entire spectrum quashed by SC for auction while addressing the discrepancy.

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It also suggested that reserve price should encourage purchase of all unsold/idle spectrum.
 
“Our response mentions that the entire spectrum quashed by the Hon’ble Supreme Court’s Order of 2 February 2012 was not being put up for auction, a discrepancy that should be addressed on priority”, it said in a statement.

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It pointed out that affordability needs to be addressed while formulating conditions for the desired market discovery of spectrum price via a successful, open and transparent auction that also provides fair revenues to the Government.
 
“Reserve prices recommended should encourage purchase of all spectrum, because unsold/idle spectrum is a valuable socio-economic resource lost to the nation forever”, it said.  

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The reserve price, auction process and spectrum-related policy features should be customized to prevent fragmentation and facilitate consolidation of spectrum. Fragmentation destroys valuable overall traffic-carrying capacity of networks, thereby inflicting huge losses to the economy, society and citizens.

It said that historic market prices, whether from 2001 (1800 MHz) or 2010 (2100 MHz) – to estimate present market prices is also inappropriate because expectations about the future (on which historic prices are based) change over time. As TRAI itself rightly notes, there has been a significant downswing in the market since 2010.
 
Vodafone said that its approach to setting reserve prices is pragmatic. VIL has chosen, a priori, a ‘reasonable’ set of prices, the 3G reserve prices in 2010, and asked whether these are likely to result in a successful auction. A variety of tests and benchmarks indicate an affirmative answer.
 
It said that the 1.25 MHz block size is extremely unsuitable, with inbuilt inefficiency creating a situation where there is wastage of precious, scarce spectrum by operators and spectrum is left unintentionally idle by the Government. This goes against NTP objectives.
 
It also said that the term ‘refarming’ of 900MHz, as used by DoT, is a misnomer and wholly untenable. Refarming has totally different connotations as accepted by the global telecom fraternity, Vodafone said.

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