Death Of Spectrum Auctions
The Supreme Court’s AGR ruling has destabilized telecom competition, pushing Vodafone Idea toward bankruptcy and undermining spectrum auctions, forcing DoT into a lose-lose situation of high reserve prices, unsold spectrum, and poor consumer outcomes.
The SC's AGR judgment of 24th Oct 2019 and its subsequent orders on this issue, has threatened the competitive dynamics of the market by driving Vodafone Idea to the brink of bankruptcy. This has a huge implication on the viability of future spectrum auctions. As it might (high probability) convert the process of "auction" virtually into "administrative assignment", thereby making "spectrum auctions" totally useless in realizing its objective of discovering the "market price of spectrum". The symptoms of which were already visible in the past, as in most auctions (except the initial ones), the spectrum is sold @ reserve price and with large amounts left unsold.
DoT's Options
DoT has no other option but to assign spectrum through auction. As it is bound by the SC's Judgment 2nd Feb 2012 reproduced as under (page 93 clause iii).
"Keeping in view the decision taken by the Central Government in 2011, TRAI shall make fresh recommendations for grant of license and allocation of spectrum in 2G band in 22 Service Areas by auction, as was done for allocation of spectrum in the 3G band."
Though DoT did file a special reference under article 143(1) on 12th April 2012, however, the same got…
Create an account to continue reading
Create AccountAlready have an account? Sign in
Need an expert in this space?
Talk to an Industry Expert
Knowledge Ridge connects decision-makers with carefully vetted subject matter experts for one-on-one calls, research sprints, and advisory engagements — across 11 sectors and 163 sub-industries globally.
Comments
No comments yet. Be the first to comment!