CCI decision soon on probe into telecom players' cartelisation
Sep 24 2013 , New Delhi
The Competition Commission of India (CCI) is looking into whether the mobile operators acted as a cartel during the recent airwave auction that had elicited tepid response, but is yet to order a formal investigation into the matter.
CCI Chairman Ashok Chawla said that the Commission would take a final decision in this matter after taking into account the Telecom Regulatory Authority of India's (TRAI) recent recommendation to lower the floor price for spectrum auction.
CCI has already received information it had sought on this issue from the Department of Telecommunications, Chawla told PTI in an interview.
"We need to consider it (probe into alleged cartelisation) further, particularly, in the light of the fact that now there is a recommendation of TRAI to the government that the auction reserve price be lowered," Chawla said.
The Commission began looking into the case after reports that Comptroller and Auditor General (CAG) had found cartelisation among players during the spectrum auctions led to tepid response during auction.
"We will consider the matter once more and take a view in the near future," Chawla said.
In November, 2012 and March, 2013, the government had put on auction more than half of the spectrum that was freed after the Supreme Court in February last year cancelled 122 mobile permits issued by the then Telecom Minister A Raja to nine telecom companies in 2008.
According to Chawla, the allegation was that bidders formed a cartel and did not bid because the threshold was high.
The counter point was that they did not bid, not because they formed a cartel but because their revenue model did not justify their bidding at that high reserve price, he added.
Noting that the Commission would have to take all these factors into consideration, Chawla said, "We will see whether there is an element of cartelisation".
Elaborating on the matter, the CCI chief said that first there was a reserve price, which was later brought down and now there is a proposal to lower it much further, "which is perhaps an acknowledgement of the fact that the base prices were higher earlier".
"So, whether the non-bidding was due to cartelisation or due to their revenue models and consideration of what is an appropriate price at which they should bid is something we will see," he said.
Earlier this month, TRAI recommended lower base price for auction of spectrum in 900 per megahertz (MHz) and 1,800 MHz bands used by GSM players.