Seeking to allay the fears expressed by finance minister Pranab Mukherjee, the department of telecommunications will initiate measures to reduce asymmetric information about the spectrum in the market -- and provide a roadmap for spectrum availability.
However, the government does not have any control over the price determined in the auction of spectrum except in determining the reserved price, Communications and IT minister Kapil Sibal said in a recent communication to Mukherjee.
"The high fees realised in last year's auction was an outcome of a transparent market based process, in which service providers participated voluntarily and entered bids based on their perception of the value of the spectrum," Sibal said.
"The approved bids were far in excess of the reserve price. Spectrum price discovery through market mechanism is transparent and well regarded," he added.
The finance minister, in his earlier communication to Sibal, had sought the rationalisation of the future allocation for license fees,
To this, the Communications minister replied that spectrum allocation through a market-based mechanism, is a 'rational and balanced' approach for price discovery, subject to availability of adequate information on quantity over a specified period of time.
Sibal said his department did recognise the need to initiate measures to reduce information asymmetry in the spectrum market and increase certainty by indicating a roadmap for making spectrum available over a specified time horizon.
The New Telecom policy 2011 and the Spectrum Act are expected to address these concerns.
DoT is also taking various measures to simplify its procedures, fast-decision making process and business friendly environment.
As part of these measures, the steps being considered include unification of all the licenses granted by DoT, delinking of spectrum from the license and review of guidelines for intra-service/area merger of access service licenses.
