Telecom honchos take battle against regulator to India govt

New Delhi, May 3 (PTI) Rankled by telecom regulator TRAI's recommendations for 2G spectrum auctions, telecom companies Wednesday made a joint pitch to top Indian government functionaries, including Home Minister P Chidambaram and Finance Minister Pranab Mukherjee, urging them not to accept the "catastrophic" recipe of the industry watchdog. Bharti Airtel Chairman Sunil Mittal, Vodafone Chief Executive Vittorio Colao, Idea Cellular Chairman Kumar Mangalam Birla and Telenor CEO Jon Fredrik Baksaas first made their case with Chidambram and Mukhejree and then followed it up with meetings with Planning Commission Deputy Chairman Montek Singh Ahluwalia and Telecom Minister Kapil Sibal. They also met Pulok Chatterji, Principal Secretary in the Prime Minister's Office and possibly also Commerce Minister Anand Sharma besides a host of top bureaucrats, including secretaries to the departments of telecom and commerce. "This has been the most destructive period of regulatory environment I have seen in 16 years," Mittal said saying Telecom Regulatory Authority of India's (TRAI) recommendations will be "catastrophic" for the entire telecom sector. Baksaas said the auction policy should be catalyst for "affordability, competition and investments" rather than leading to tariff hikes as would be the case with TRAI setting a very high base price for the auction. "If the decision are taken in interest of the industry, they (TRAI recommendations) have to be changed. I think the current recommendations will kill the industry," Birla said. TRAI has suggested a base price of Rupees 36.22 billion (about USD 670 million) for one megahertz (MHz) for pan-India spectrum, which is around 10 times higher than the price at which 2G licences bundled with 4.4 MHz spectrum were allocated in 2008 under the then Telecom Minister A Raja. According to TRAI, a minimum of 5 Mhz spectrum should be allotted, which means that pan-India airwaves in 1800 MHz band will cost Rs 180.0 billion (about USD 3.4 billion) . "We presented our case to leadership and senior ministers in the government .... This industry is vital for the nation and the recommendations of TRAI could spell a death knell for the industry," Mittal told reporters here. The objective of the meeting was to bring to the government's attention the "disastrous" impact the recommendations will have on the ability of operators to continue their operations. Asked if Idea will participate in the forthcoming 2G auction, Birla said: "I don't think it makes sense to participate in the auction for anyone at these prices." "Subscriber will definitely pay much higher tariff if this is the kind of reserve price (accepted by the government)," he said. On tariff hike, Mittal said the country's leadership wants affordable tariff. "Recommendations (of TRAI) fly on the face of that aspiration of the government to give affordable tariff." Telenor Group President and CEO Jon Fredrik Baksaas said the government alone carries political responsibility and therefore the final say on policy. "We urge the Indian Government to take its rightful political initiative now. This is the time to ensure that the policy made for licence auctions allows affordability, competition and investments to remain in India," he added. Asked about government's response, Birla said, "I think government has said that they are examining the issue thoroughly before giving go ahead to any decision." On probable tariff hike if the recommendations are accepted, Birla said subscribers will definitely pay much higher tariff if this kind of reserve price comes around. "Where is the question. (If) there is no industry, there is no consumer. Everything goes hand in hand," Mittal said. PTI Caption for pic: Combo pic of (L to R) Jon Fredrik Baksaas, CEO of Norwegian firm Telenor; Vittorio Colao, Chief Executive of Vodafone Group; Sunil Bharti Mittal, Chairman and Managing Director, Bharti Airtel; and Kumar Mangalam Birla, Chairman, Aditya Birla Group, arriving to meet India's Finance Minister Pranab Mukherjee in New Delhi on Wednesday. PTI Photo