Bharti Airtel Slams Indian Regulator

When the Telecom Regulatory Authority of India (TRAI) issued its new recommendations for the allocation of 2G spectrum yesterday, it seemed likely that the country's big GSM operators would react strongly against a rule-change that would hit them hard in their wallets. (See TRAI Mulls New 2G, M&A Rules.)

That India's largest mobile operator, Bharti Airtel Ltd. (Mumbai: BHARTIARTL), decided to issue a statement on the matter isn't that surprising. (See Bharti Needs More Data Drive and India Passes 500M Mobile Mark.)

What is unusual, though, is the forthright language deployed: The carrier is clearly outraged.

Here's what Bharti has to say (in an emailed statement) about the TRAI's ideas:

    The latest recommendations by the TRAI for allocation of 2G spectrum are shocking, arbitrary and retrograde. They overturn all existing policies of Department of Telecommunications for the last 15 years, recommendations made by various government committees and even TRAI’s own earlier recommendations. Besides, these are against all existing global norms for spectrum allocation and efficiency.

    It seems that the recommendations are designed to punish efficient and performing operators like us for contributing to the growth of Indian telecom sector and are instead tailor made to benefit select operators whose contribution to telecom growth and government revenues have been negligible.

    Over the years, operators like us have brought services at the lowest tariffs in the world, to the door steps of the common man and connected 85 percent of India’s population, including 4.4 lakh
    [440,000] villages. We have invested over Rs. 70,000 crores [700 billion Indian rupees/US$15.52 billion] to build networks and services and have contributed thousand of crores to the exchequer in form of license, spectrum fee and other levies. In terms of spectrum charges, we have contributed up to 10 times more per Mhz than many other operators.

    While the world looks at India’s telecom growth story with awe and attempts to emulate India’s telecom business model, it is sad to note that the recommendations attempt to pull down a sector that is one of the biggest contributors to India's economic and social development and showcase of India’s economic reforms process.

    We are confident that the DoT and the Government will take a rational approach and summarily reject these arbitrary, impractical and perverse recommendations.

Bharti's response is understandable, given that, under the TRAI's recommendations, it would be asked to pay a retroactive fee for 2G spectrum it has already been awarded. In addition, the operator is currently involved in the auction for 3G spectrum that could cost the carrier more than INR140 billion ($3.1 billion) if it wants to secure airwaves that cover all of India's 22 circles (telecom service areas), so any suggestion that it will be asked to pay more for existing 2G capacity is not likely to be greeted with anything other than the anger and disdain displayed in the statement issued today. (See Fears Over 3G Fee Fairness and Bids Flood In for India's Spectrum Auctions.)

— Ray Le Maistre, International Managing Editor, Light Reading

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