Citing high reserve price of spectrum as the reason for ‘unsuccessful auctions’, Planning Commission Deputy Chairman Montek Singh Ahluwalia has suggested that the government refer the matter back to telecom regulator Trai for recommendations.
"My personal view is that its better to get a recommendation from Trai. . .(because) benchmark is some unrealistic price and it won't lead to a solution," Ahluwalia said during the release of European Business Group position paper late on Wednesday evening.
Either the spectrum prices can be lowered arbitrarily or the matter can be send to Trai, he added.
"Spectrum is a national resource. We had two unsuccessful attempts to auction it. It's quite clear that reserve price was too high.
"What I actually suggested is that you have a choice, you can either arbitrarily lower the reserve price or you can refer the matter back to the Trai."
The government in the previous two rounds of spectrum auction was able to sell airwaves for around Rs 13,000 crore (Rs 130 billion), way below its target of garnering about Rs 40,000 crore (Rs 400 billion).
The government has plans for the third round of spectrum auction and may put on block 2G GSM airwaves in Delhi and Mumbai circles, and CDMA spectrum in 13 circles that remained unsold in the previous sale held in March, according to sources.
The government will conduct the third round of auction, putting on block all 2G spectrum freed from cancellation of 122 licences, after the Supreme Court in February this year ordered the DoT to auction entire spectrum freed.
Sources said DoT will move a proposal to the Empowered Group of Ministers, headed by Finance Minister P Chidambaram, for third round of auction.
As per DoT's plan for the third round of auction, pan-India 2G spectrum in 1800 Mhz frequency band will be put up for bidding.
The Department of Telecommunication is, however, yet to decide on the quantum of CDMA spectrum that would be auctioned in 13 circles, sources said.
Ahluwalia further said telecom is a very important sector but it has ran into problems due to various reasons, but many of the problems are now left behind.
"I do agree that telecom is a very important sector, it has done very well. It has ran into problems you know because of a number of things including government being directed to follow a particular line by court.
"Now we are at a point where we have done a lot of compliance, some of those problems are hopefully behind us."
He said there is a need to have a fresh look that will allow the telecom sector to play a healthy and strong role in the years ahead.
Image: Montek Singh Ahluwalia