New Delhi (PTI): The Centre has submitted at the Delhi High Court that the allegation of a multi-crore scam in spectrum allocation is baseless and it is being done by telecom companies that do not want entrants in the sector.

The Centre's response was on a petition challenging its policy of allocating spectrum (air waves on which wireless communication is provided) without inviting an open tender and alleged that due to faulty policy the government could not get a fair price and it "caused a loss of Rs 50,000 crore to (the) public exchequer".

"It seems that the petitioner is acting (at) the behest of parties who shall have competition from the new entrants in the market. This is with an ulterior motive of stalling competition," the government said in its 48-page affidavit filed at the Delhi High Court.

"The allegation that there is a scam of several thousand crores is totally false and has been made only to embarrass the Government of India," the Centre said.

Refuting the allegations made by petitioner Arvind Gupta, the Centre submitted that the first-come-first-served policy was followed to encourage competition and to provide a level playing field to newcomers in the sector.

"If the spectrum was to be auctioned to the highest bidder for an upfront payment, such a bidder would pass on the cost to the customer or would go bankrupt. The cost of running the services can become so high that nobody would be really interested in applying for licence," the government said.

Gupta, in his petition, alleged that the government's procedure was not transparent and intended to benefit some private players in the telecom industry.