Telenor Group not to bid for Mumbai

Telenor Group will not be able to bid for Mumbai spectrum if the reserve price is not reduced by at least 50 percent.

The Group is now looking to the DoT and Supreme Court for an intervention that ensures that the second round of auctions do not also fail and spectrum being a public resource is put to public use.

Such an intervention is the only way to ensure a successful auction - which means wide participation, all spectrum sold, healthy bidding at possibly higher than reserve price. Almost 70 percent of available spectrum remained unsold in the first round of auctions. If the DoT and Supreme Court do not intervene, we apprehend that this second round will be no different than the first.

The exit of competitors like Uninor from Mumbai is certain to have a significant negative impact on mobile phone users in the city. Pre-paid tariffs are expected to increase significantly by 100 percent as per Telenor estimation.

The Group is also concerned by the differential treatment between 800 MHz CDMA spectrum and 1800 MHz GSM spectrum. Considering that an unrealistic reserve price caused auctions to fail both of these bands in these circles, it is difficult to understand why the right decision of 50 percent reduction is being taken only for CDMA operators.