Vodafone, which has not applied for taking part in the spectrum auction to be held in March, today said the reserve price is too high and the company cannot afford such a price in India where there is uncertainty about airwaves and revenues are low.
"The problem is that in India there is a misperception of what is the value of spectrum. The reserve prices are set too high. India has very low prices and revenues so we cannot afford to pay high price for spectrum," Vodafone chief executive officer Vittorio Colao told PTI.
The Department of Telecommunications (DoT) has announced plans to conduct auction for spectrum that remained unsold in the November auction along with the airwaves that are held by operators whose licences are due for renewal in 2014.
Vodafone holds 900 megahertz (Mhz) band spectrum in Delhi, Mumbai and Kolkata under permits that are to be renewed in 2014. Russia's Sistema which operates on CDMA platform is the lone applicant for sale of airwaves in the March auction.
"We have told them (Indian government) a number of times that the order of magnitude that they have in mind just does not make sense," he said. He said that the government needs to take clear and simplify views about the benefits that will come from lower value of spectrum.
In November, 2012 auction, the government received bids worth about Rs 9,407 crore for total spectrum amounting to minimum of around Rs 28,000 crore that were put for auction.
He said that the company will "engage the (Indian) government to explain again why we think that they should review downwards significantly the perception of value of spectrum."
Vodafone India, along with Bharti Airtel and Loop, had approached the Delhi High Court against DoT decision to put up for auction the more efficient 900 Mhz spectrum.