Vodafone finds govt stance on spectrum sale coercive

Reuters

The telecom secretary had recently said that the government will auction the spectrum being held by incumbent GSM operators in 900 MHz band whose licences are coming up for renewal in November 2014.

They will, however, be allowed to hold 2.5 Mhz in each circle in the same band even after expiry of their licences after paying a market-determined price.

Vodafone is one of the companies whose licences in Delhi , Mumbai and Kolkata are due for renewal in 2014.

“Most importantly, they, in effect, are coercing participating in the auction particularly in our case since three of our unified access licences are due for extension in November 2014,” he added.

Ramachandran said that any decision that licences can be assured of spectrum only if they participate in the auctions is completely untenable both under policy and licence.

The Union Cabinet on 13 December approved a 30 percent reduction in reserve price for spectrum in 1800 MHz band for 4 service areas

View the Original article

Vodafone fires first salvo against spectrum refarming

Not just Vodafone, Bharti and Idea have also in the past protested strongly against the government’s decision to refarm spectrum. Reuters

Even for the 2.5 mhz of 900 mhz band which these telcos will be allowed to retain, they will have to shell out two times the 1800 mhz reserve price in all circles.

For Vodafone, licences in all the three circles of Mumbai, Delhi and Kolkata come up for renewal beginning November next year. While asking for the licence extension, Vodafone has opposed any move towards refarming, though not in as many words.

The three identical letters it has written requesting for licence extension in each circle mention that “extension of license period is a continuation of the already set up network, including continuation of existing spectrum, which is intrinsic to our licence and is being used for providing service to consumers under the licence”.

According to sources, Vodafone already has 8 mhz of 900 mhz band spectrum in Delhi and Mumbai and 7.8 mhz in Kolkata. In the 1800 mhz band, it holds only 2 mhz in each of these three circles.

Obviously, if it is forced to return all 900 mhz spectrum and then participate in auctions at multiple times the price, business will suffer.

Not just Vodafone, Bharti and Idea have also in the past protested strongly against the government’s decision to refarm spectrum.

Speaking on the refarming issue earlier, GSM industry body COAI had pointed out that servicing 450-500 million subscribers in the existing 900 Mhz band with the same quality of service with a limited 2.5 Mhz of spectrum in the 900 Mhz band and the remaining on 1,800 Mhz band would become next to impossible and disruption of wide-scale services should be expected.

COAI had also pointed out that an operator with 2.5 Mhz in the 900 Mhz band and the remaining spectrum in 1,800 Mhz band is worse off than an operator with its complete network in the 1,800 Mhz band as this network will give a false delusion of coverage.

The difference in spectrum propagation/network design in the two bands will lead to coverage constraints.

An industry expert pointed out that licence and spectrum have been delinked but only for future licence agreements. He also said the united access service licence in its present form has no specific reference to the government’s obligation to give specific spectrum in a specific band and at a specific price. The government has full flexibility to change band as well as price.

.pagination_article

View the Original article

Chidambaram, Analjit meet, but not for Vodafone

Finance Minister P Chidambaram. Image courtesy PIB

Vodafone's negotiations with the Ministry of finance for the settlement of the tax case is stuck on the issue of Rs 3500 crore interest if the Government is willing to lift the penalty, provided that the telecom company taxes and the interest charged. The telco is, however, prepared to pay taxes as a penalty and interest have been lifted.

The Government can waive the penalty under the section 273A of the income tax law, according to a CNBC-TV18 report.

"Punishment is not due as the case before the Supreme Court" sources inducted into the case in Vodafone said.

Sources in the Government said that it is politically difficult to retro the retrospective amendment Amendment prospective and in paragraph 9 of the T Act will continue.

"The unintended consequences of section 9 will be treated according to the Commission report of Parthasarathi Shome," Government sources said.

. pagination_article

View the Original article