Anand Sharma, the Minister of Commerce and Industry, has criticised the Telecom Regulatory Authority of India (TRAI’s) proposal on spectrum auction of 2G licenses.
Sharma has stated that if implemented TRAI’s recommendations would render investments worth Rs 1 trillion by mobile players, redundant. According to him, TRAI’s reserve price for 2G spectrum auction is nearly 70-80 times higher than those in the developed countries.
In a letter written to Pranab Mukherjee, Sharma mentioned that the higher reserve price for auction of 2G license will surely limit the participation in auctions and have major implications on tariffs. He added that the upcoming sale of airwaves should be done in a manner that balances the interests of the consumer and industry.
Sharma also cautions against re-farming of 2G spectrum as recommended by the TRAI. He observes that the re-farming cost is more than 13 times the amount telecom players paid in 2008, when A Raja, the former Minister of Communications and IT allocated pan-India permits bundled with 6.2 MHz of 2G spectrum, for a mere Rs 16.59 billion.
Sharma has made suggestions to finance minister not to accept TRAI’s recommendations on re-farming or redistributing airwaves held by incumbents in the 900 MHz band and substituting it with frequencies in the 1800 MHz band, when licences of mobile phone companies come up for renewal beginning 2014.
