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Indian auditor calls out operator ‘cartel’ in recent auctions

The Indian Comptroller and Auditor General has accused the country’s operators of behaving like a ‘cartel’ during the most recent round of spectrum auctions. In addition, the auditor has alleged that the government’s inactivity has – whether knowingly or otherwise – made it complicit in this behaviour.

India’s auditor has lashed out at the country’s government and telecom authorities before – most notably (and relevantly) in 2010, when it slammed the 2008 2G licensing process for losing up to $39 billion in potential revenue.

Considering that this objection resulted in the government cancelling all 122 issued during this process and holding fresh auctions for the spectrum in question, the auditor’s criticism of the most recent auctions could have serious consequences. The auditor claims that the operators colluded to drive down prices on starting bids, which again resulted in the government losing potential revenue.

Notably, no operators bid for CDMA spectrum due – supposedly – to the unjustifiably high base prices for spectrum blocks. The auditor has now officially insinuated that the lack of bids was the result of a premeditated agreement between the operators.

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