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Telecom Firms Lobby With India Government Against Regulator's Bandwidth Auction Proposals

05/02/2012 | 08:11am US/Eastern

The chiefs of Indian and foreign mobile-phone companies Wednesday met with top government officials to press their views against the telecommunication regulator's recent bandwidth auction proposals such as a steep base price.

The meetings come a week after the Telecom Regulatory Authority of India proposed starting prices for the bandwidth sale several times higher than what operators pay currently, and also the auction of only one slot of bandwidth, among others.

Local operators have called the proposals "regressive." Analysts say the suggestions, if accepted by the government, will increase operational costs for companies and call tariffs for consumers.

Monday, the government said it was referring back the bandwidth auction proposals to the regulator for a review, and expects TRAI to revert by May 14. India plans to take a final decision on the auction process by the end of May.

After the meetings Wednesday, Jon Fredrik Baksaas, chief executive of Norway's Telenor ASA (TEL.OS), which runs its Indian operations through a joint venture, said that the auction proposals weren't as per the Supreme Court's directions and that the regulator completely ignored the views of all operators while framing the proposed rules.

"India must remain an attractive destination for all foreign investors across industries, not only because of the growth potential it indeed offers, but also its predictable, logical and investor-friendly policy environment," he added.

Bharti Airtel Ltd. (532454.BY) Chairman Sunil Mittal, Idea Cellular Ltd. (532822.BY) Chairman Kumarmangalam Birla, and Vodafone Group PLC (>> Vodafone Group plc) CEO Vittorio Colao were among the other executives who met with officials including Finance Minister Pranab Mukherjee, Commerce Minister Anand Sharma and Telecom Secretary R. Chandrashekhar.

The executives are scheduled to meet with Telecom Minister Kapil Sibal later Wednesday.

Bharti's Mittal told reporters that the regulator's proposals were "catastrophic for the industry," and "destructive."

TRAI officials couldn't be immediately reached for comment, but Chairman J.S. Sarma has previously justified the auction proposals.

-By R. Jai Krishna, Dow Jones Newswires; +91.11.4356.3333; krishna.jai@dowjones.com

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