Telenor India has criticized the Telecom commission’s recent approval of base price for the crucial 700 MHz spectrum and its decision to hike upfront payments to 50% from the earlier 10% proposed by the TRAI for both 700MHz and 800 MHz band. A spokesperson from Telenor India told MediaNama that the Telecom Commission’s decision to hike initial payment amount “come as a surprise to the telecom operators as this increase was not discussed during the consultation process with the regulator.” For the upcoming auctions, TRAI suggested that telcos could first pay 10% of the bid amount; the balance 90% could be paid over 18 years with 18 equal annual installments, along with interest. While, last week the telecom commission hiked the upfront payment to 50% and gave its approval for spectrum rates suggested by the TRAI in January. Higher rates could hurt industry: According the Telenor, a higher payment percentage along with a service tax of 14.5% might put additional financial burden on industry. “The increase in cost of capital will discourage operators to bid aggressively in the auctions and will also impact the business viability of the acquired spectrum,” said Telenor. It added that the earlier option with a 10% upfront payment scheme could attract more telcos to place bids and create a better level playing field. Spectrum auctions crucial to operations: Last month, The Telenor Group posted an operating loss of 3,100 million Norwegian Krone (NOK), approximately Rs 2,530 crore for its Indian operations during its first quarter results,…
