Vodafone bats for spectrum de-linking, auction

Vodafone Essar on Tuesday wrote a letter to the telecom ministry requesting it to hold auctions for the spectrum beyond current holdings, in chunks of 1 MHz spectrum each.

This recommendation is a part of stakeholders' views sought by the ministry as part of the formation of National Telecom Policy.

The second largest telecom operator said auction would avoid possible legal disputes and pave the way for licence extensions.

"Auctions are the only way to deliver true underlying value of this precious resource and put it in the hands of the entity that values it the most," Vodafone said in the letter.

It also said de-linking spectrum from licence is the way forward, as it aided spectrum reforms like mergers and acquisitions, spectrum auctions and trading.

It also demanded a cut-off date for spectrum de-linking from the department of telecommunications.

The company also sought a change in spectrum charges which, according to the company, discriminates them against dual technology

operators.

"The current regime of escalation charges punishes growth and performance as spectrum cost goes up. Dual spectrum operators, despite holding equivalent or more spectrum, pay a fraction of usage charges paid by the GSM players," Vodafone alleged.

As per its calculations, Bharti Airtel and Vodafone will be paying Rs 32,000 crore (Rs 320 billion) as spectrum usage charges, while Reliance Communications and Tata will only pay around Rs 6,000 crore (Rs 60 billion).

Vodafone also pointed out while they are allowed to pass through voice traffic access charges, no such mechanism is in place for data access charges in terms of bandwidth charges paid to other operators.

The company claims the principle and objective of both is the same.