Uninor Moves SC to Conclude Auctions by June 2

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March 21, 2012
Gagandeep Sodhi
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In a desperate move today, Uninor filed an application with the Supreme Court asking it to direct the government to conclude the 2G auction by June 2 of this year.

The Supreme Court had earlier cancelled 122 licenses (including 21 licenses of Uninor) which were issued during the reign of the former minister, A Raja. It had further directed the government to conduct auctions within four months. In case the auctions are not held by June 2, Uninor stands to lose its license and spectrum to operate in the country. The government had earlier said that it cannot conduct the auctions in the given time frame. (See Uninor: On Pins and Needles? and 2G Verdict: An Easy Exit Route or Fresh Troubles?.)

We believe that auctions can and should be conducted by June 2 this year. 400 days are not required and do not comply with the intention of the Supreme Court, Sigve Brekke, Executive Vice President at Telenor Group said in a hurriedly called press conference today.

As part of its application to the Supreme Court, Uninor made five critical points:

Government should conduct a multi-stage auction

Government should auction a minimum of two blocks per circle of 6.2 MHz each in the first stage

The reserve price should be kept same as the 3G reserve price

Government should follow the same auction format and structure as 3G auction, and

Government should allow deferred payments.

On asked why the auction base price should be the same as the 3G auction base price, Brekke elaborated, This will ensure that only serious players participate in the auction. We should use the same format, which is proven and efficient. This is an attempt on our part to find a solution to the problem. It is an attempt to be pragmatic and practical.

Earlier while auctioning 3G airwaves, the government had set INR 35 billion (US $690 million) as the base price for the pan-India spectrum. This is a shift in stance by Uninor as the company had earlier suggested INR 16.5 billion (US $325.7 million) as the base price.

Uninor stands to lose all of its 21 licenses by June 2 in case the government doesnt conduct auction by June 2. Our licenses will get quashed by June 2. Competition is trying to kill us. We believe that the Supreme Court order must be compiled with and the government must end and not prolong the uncertainty, says Brekke.

Despite the cancellation of its licenses, the company added the maximum number of new subscribers in January this year and has added the second highest number of subscribers in February. (See Uninor's Alarming Valuation.)

The company has made substantial investment in the Indian operations and this forced participation in the auction will have huge impact on its financials. Brekke, however, refused to comment on the amount Uninor might invest in the auctions.

The company is also facing problems on other fronts as well. Post Uninor's unhappiness with its India partner Unitech, the latter has decided to sell its stake to Uninor. Telenor has 74 percent stake in the Indian venture. The company would need to form a new venture to bid in the auctions. The new entity will bid in the auction and most likely we will again take 74 percent share in the new entity, confirmed Brekke.

These are tough times for the operator. On asked what kind of response did he expect to the application filed today, Brekke said, UmmmI dont know. I really dont know. That pretty much sums the state of the current scenario of the Indian telecom industrynobody really has a clue.

Gagandeep Kaur, Editor, Light Reading India

	Yes, it offer faster mobile broadband service that will simplify my life
	No, only if it offers killer apps
	Maybe, if the industry shows strong commitment
	Not sure

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Uninor Moves SC to Conclude Auctions by June 2

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