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Tata writes to govt for simultaneous allocation of spectrum to all winners
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Ratan Tata, the chairman of the Tata Group, has written to the government urging it to allocate spectrum simultaneously to all the winners in the upcoming auction for the right to offer third generation (3G) telecom services. This is needed to ensure a level-playing field between the winners, the letter said.

An external spokesperson for the Tatas said the group would not be able to comment on communication with the government. A person familiar with the letter’s contents said that it was prompted by concerns that the government might allocate spectrum as and when it becomes available instead of giving equal amounts to all the winners at the same time.

In the letter, which is addressed to the cabinet Secretary, KM Chandrasekhar, Mr Tata has said that the government should ensure that all 3G bidders get spectrum at the same time as that is fair and equitable, a government official familiar with its contents told ET. The letter was sent last week.

If some winners get spectrum before the others there wouldn’t be a level playing field, Mr Tata is believed to have told the cabinet secretary.

Mr Tata’s letter comes at a time when a Group of Ministers is scheduled to take a decision on the modalities of the auction and whether to go ahead with the sale of just three slots, instead of four planned earlier, because some of the frequency spectrum is yet to be vacated by the armed forces.

In contrast to Mr Tata’s stand, in November, Bharti group chairman Sunil Mittal had written to the department of telecommunications stating that even as the auction is expected to close in February, operators would require some more months to roll out their networks and so, even if spectrum is available for some operators only in June, it will not be have any serious consequence.

Mr Mittal was arguing for four slots to be auctioned, even if spectrum wasn’t immediately available. Some operators could get it later than others, Mr Mittal had suggested.

“Auction 4 slots with the top two bidders getting the spectrum at closing (of the bidding) and the third and fourth bidder being granted the spectrum as soon as it is cleared by Defence in June 2010,” Mr Mittal had said.
The auction winners have the right to frequency spectrum or airwaves which are reserved for 3G telecom services. These allow faster internet access allowing users to better enjoy such delights as watching movies on cellular phones. The services currently available, commonly known as 2G, also allow internet access but at a lower speed.

Thirteen mobile phone firms are jostling for space in the Indian telecom market and three more companies are due to launch services by next year. Operators are expected to engage in a bidding war to grab 3G airwaves.

In his letter Mr Tata has also argued that once paid for spectrum should be allocated straight away and winners should not be made to wait because of non-availability of spectrum.

An internal DoT note also says that good auction practices requires that only spectrum that is available should be auctioned. If that doesn’t happen the bids would be lower causing revenue loss to the government.

The government had earlier announced that it would auction four slots of 3G spectrum to private operators in all circles and require the winning bidders to make the full payment within 15 days. But the defence forces, who were supposed to vacate 25 MHz of spectrum by December 7 have expressed their inability to meet that deadline.

As a result, the DoT can at most auction three slots.

If the nine-member empowered group of ministers (EGoM) headed by finance minister Pranab Mukherjee accepts the proposal to auction only 3 slots, it would result in a steep increase in bid prices as mobile firms will scramble to get access to the scarce resource.

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