Inter-ministry panel opposes TRAI on fresh 2G auction
28 Apr 2012
An inter-ministerial panel set up to supervise the upcoming auction for 2G airwaves has opposed the Telecom Regulatory Authority of India to allow mobile phone companies to stagger their payments for spectrum bought through bidding.
The committee is also of the opinion that mobile phone companies must not be allowed to mortgage spectrum to raise funds from financial institutions.
Earlier this week, TRAI, while proposing a 13-fold increase in the reserve price for spectrum in the 1800 MHz band, had suggested an easier payment method to ease the burden on successful bidders.
The regulator had proposed that winners pay only 33 per cent of the bid amount up front, followed by a two-year moratorium, with the remaining money to be paid in 10 equal instalments annually. It had also suggested that mobile phone companies should be allowed to mortgage spectrum since the ''telecom sector requires huge capital investment periodically and it was necessary for telecom players to have access to adequate funds from financial institutions''.
But the panel set up for 'guiding and supervising the entire process of airwaves auction' holds a different view.
"Two issues - deferred payment and allowing spectrum as mortgage to raise funds from financial institutions - were discussed. Almost all members were of the opinion that both should not be allowed," said the minutes of the 23 April meeting of the 11-member inter-ministerial committee, according to The Times of India.
