Telecom Commission to meet again Saturday on spectrum pricing

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SME Times News Bureau | 25 May, 2012
The Telecom Commission at its meeting Thursday could not decide on the sector regulator's recommendations on key issues such as pricing and refarming of spectrum. It will meet again May 26.

The Commission, however, concluded that 10 MHz in all should be made available for auction in all the circles and the auction will be open to both new players and old players.

In another development, the union cabinet did not take up the National Telecom Policy 2012 that proposed to de-link spectrum from licences, reduce number of different licences, give industry liberal mergers and acquisition norms and remove roaming charge burden for consumers.

After the Commission meeting, R. Chandrasekhar, department of telecom (DoT) secretary, said: "As far pricing is concerned, the issue has not been completed in terms of discussion. The commission will meet again Saturday and will take up issues on pricing and other issues which could not be covered."

"No modalities of refarming of the timing has been taken at this point, only a provisioning has been made," he added.

The commission however concluded that while the old operators would be entitled to bid for maximum of 2 blocks of 1.25 MHz which means a maximum of 2.5 MHz, the new players can go for 4 blocks of 1.25 MHz.

The commission has also agreed with the recommendation of liberalising spectrum. "All spectrum in the future will be liberalised spectrum meaning anybody who gets the spectrum though the auction would be free to use any technology in that spectrum."

All these issues will be analysed and put before the Empowered Group of Ministers, he said.

The Telecom Regulatory Authority of India (TRAI) has recommended, among other proposals, a reserve price of Rs.3,622 crore for 1 MHz pan-India spectrum, which is around 10 times higher than the price at which 2G licences were allocated in 2008 under then Telecom Minister A. Raja.

The proposals have been highly criticised by the operators and independent analysts alike. Calling TRAI's recommendations a 'death knell' for the industry, the operators have also warned of a 100 percent hike in tariffs if the proposals are accepted.

According to a study conducted by consultancy PricewaterhouseCoopers (PwC), telecom tariffs are expected to rise by 90 paise a minute in metros and 20-34 paise on an average across the country if the sector regulator's recommendations on spectrum pricing are accepted.

Following constant opposition from the industry, the DoT had asked the regulator to review the recommendations. However, TRAI largely retained its proposals on high reserve price even in the revised paper.

The recommendation comes in the wake of the Feb 2 Supreme Court order cancelling 122 telecom licences issued in 2008.