New foreign telcos give 2G pre-bid conference a miss

The first conference hosted by the government ahead of the 2G auction today saw no participation from any new foreign player, indicating that the foreign telcos may give the auction process a miss.

This despite the government indicating that it may allow foreign companies to bid for spectrum auction, scheduled for November, without an Indian partner.

Earlier, the foreign players, in order to participate in the auction had to form a joint venture (JV) with an Indian partner. However, according to the new norm, they can participate in the 2G auction now and form a JV later.

Foreign firms are allowed to bid for spectrum, but they will have to form their Indian venture before participating in the auction.

Existing operators such as Bharti Airtel, Vodafone, Idea and existing foreign players such as Telenor, Sistema Shyam Teleservices participated in the conference.

Among the Indian players, Mukesh Ambani led-Reliance Industries (RIL) participated. RIL, at present, doesn’t have presence in the telecom space. It has a pan-India broadband wireless access (BWA) licence that allows it to provide broadband wireless internet, but not voice service.

RIL’s entry in the already crowded telecom space could further intensify competition in the sector, resulting in a fresh round of rate wars.

If the participation in the conference is any indication, then the actual auction process is likely to see aggressive bidding by the incumbents as well as players whose licences were cancelled by the Supreme Court judgment of February 2012.

According to an official at the Department of Telecommunications (DoT), the conference progressed smoothly. Most questions posed were regarding refarming of spectrum and other issues not immediately related to the auction. DoT claimed it was able to answer most of the auction-related queries.

The representative raised queries on interest rate that will be charged to companies for financing spectrum auction, re-allocation of the same spectrum held by telecom companies whose licences have been cancelled, top-up spectrum and inter-circle roaming agreement, among others.

DoT officials took note of the queries and assured to respond to all of those by September 14.

According to Rajan Mathews, director general of Cellular Operators Association of India (COAI): “Almost all the incumbents and many cancellation-hit players participated in the conference. Almost 70 per cent of the questions related to the auction process didn’t get answered.” “Since, the 2G auction process is different from the 3G one, the operators want that after the issue of NIA (notice inviting applications), another bid conference should be hosted to get the operator’s queries answered,” he added.

NIA is the final document issued by the government before auctions begin. DoT will issue the NIA later this month.

DoT will hold another round of meeting with the stakeholders in two to three days after responding to queries raised at the pre-bid conference.