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Telecom Commission seeks clarity on TRAI proposals

Delhi,Business/Economy,Science/Tech, Mon, 30 Apr 2012 IANS

New Delhi, April 30 (IANS) The Telecom Commission Monday sought more information and clarifications from the telecom regulator on its recommendations on 2G auction, including spectrum pricing, which have invited strong objections from the industry and independent analysts alike.


"We wanted to understand the basis on which this reserve price has been arrived at," said Department of Telecom (DoT) Secretary R. Chandrasekhar, so that the commission could firm up its position on issues like pricing and its likely impact on the tariff and the industry.


The DoT will send its queries by Wednesday and expects to receive a response from the Telecom Regulatory Authority of India (TRAI) in about two weeks. The commission will again meet May 14.


After that, the Empowered Group of Ministers will decide on the auction rules, Chandrasekhar said.


Among other things, the TRAI this month proposed an auction starting price that is 10-13 fold increase over what the operators had paid in 2008 and selling just 5 megahertz spectrum per zone.


TRAI was asked to give its recommendations after the Supreme Court Feb 2 ordered cancellation of 122 licences issued in 2008 and asked the government to re-distribute the licences through auction.


TRAI has proposed reserve price of Rs.3,622 crore for one megahertz of spectrum at pan-India level. This is around 10 times higher than the price for 2G licences in 2008.


It has also said that the auction would be open to all the players, including the incumbents and the new players, only those firms which are holding spectrum beyond the prescribed cap should not be allowed.


Telecom players have objected to the regulator's recommendations. Terming these as flawed and retrograde, the operators have said acceptance of the regulator's proposals by the government would lead to almost 25 to 30 percent hike in call tariffs.


They have also urged Communications Minister Kapil Sibal to reduce the reserve price by about 80 percent and auction all available spectrum.


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