Idea Cellular opposes extension of permits to Bharti Airtel, Vodafone India in New Delhi

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Idea to challenge Rs 600 crore government penalty notice
Idea to challenge Rs 600 crore government penalty notice

NEW DELHI: In a rare instance of disagreement between GSM telecom companies, Idea CellularBSE 0.43 % has opposed the extension of permits for Bharti AirtelBSE -3.06 % and Vodafone India in Delhi beyond November, saying it violates auction rules and would hurt business and market share for India’s No. 3 operator.

Airtel and Vodafone have asked the department of telecom for permission to operate in Delhi for at least six months after November, saying they need more time to reconfigure their networks to new spectrum won in the February auction.

They said the allocation of airwaves was delayed and without the additional time, services to 20 million subscribers in Delhi may get disrupted.

However, if the permits are extended, it would affect the allocation of airwaves won by Idea in the same auction because they include portions in the 900 MHz band that are currently held and used by Airtel and Vodafone.

“Any delay in spectrum allocation beyond 30.11.2014, would result in delay in the launch of Idea services on the said 900 MHz spectrum by an equivalent period, and is totally unacceptable,” Idea Cellular Chief Financial Officer Akshaya Moondra wrote in a letter to the telecom department, in response to the request for extension by its two larger rivals.

The Aditya Birla Group company said it should soon be allocated the airwaves in Delhi, for which it has paid Rs 926 crore and provided a bank guarantee of Rs 547.16 crore. “Any delay would make us incur loss on account of interest cost for each day of delay without corresponding revenue,” Idea said, adding that the interest cost on its investment was Rs 1.02 crore a day.

Idea has instead proposed a frequency allocation rejig that will ensure it receives its newly won airwaves without any disruption in services for subscribers of Airtel and Vodafone.

The regulatory heads of the three telecom companies met with the Member Telecom on Friday and discussed the matter.

What had complicated matters is that the blocks of bandwidth that Airtel and Vodafone have been awarded within the 900 MHz band are different from what they currently hold in the band, requiring the operators to reconfigure their networks.

Idea has proposed that these operators retain the airwaves they currently hold and that the remainder in that band be awarded to the Aditya Birla Group company.

“This would allow seamless transition by the due date (November 30),” without any disruption of services and Idea would also be able to begin using airwaves in the 900 MHz band from that date, the company wrote. However, experts say that Idea’s solution, while easy to implement, might run at cross-purposes with the Notice Inviting Applications.

The NIA is a legal document that laid down the framework for the February auctions.

The telecom department has made it clear that it does not favour any extension of permits.

The regulator has come down heavily on the telecom department for delaying the allocation of airwaves by over eight months and has asked it to meet with the industry and find a way to ensure that services to subscribers are not disrupted in Delhi.

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