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The Telecom Commission has approached the Telecom Regulatory Authority of India (TRAI) to decide on the reserve price for the spectrum to be auctioned in the 800 MHz band in the next 15 days. Currently, the 800 MHZ band is being used by CDMA players.
The Telecom Commission wants to finalise the reserve price for the 800 MHz band at the earliest as it wants the government to auction spectrum in this band along with the spectrum auction in the 1800 MHz and 900 MHz bands by early 2014.
The Telecom Commissions? follows its decision to auction spectrum in the 80 MHz band to CDMA players. Earlier, TRAI had suggested that the spectrum in the band should be auctioned to GSM players. However, the regulatory body?s proposal was opposed by CDMA players on the grounds that the move if accepted by the government would block their future roll out plans.
In its final recommendations on auctioning spectrum in the 800 MHz to CDMA players instead of GSM operators, the Telecom Commission stated that it would be more appropriate for the government to let market forces to decide the usage of preferred technology particularly since the government has now allowed liberal usage of technology for providing telecom services.
In addition, the Telecom Commission has also decided to modify the roll out obligation to be followed by the service providers. In its efforts to provide telecom services to the existing 50,000 plus uncovered villages, TRAI had proposed to change the existing roll out obligation, which is based on geographical coverage, to a system where operators would have to roll out services based on population. Though the Telecom Commission has agreed with the TRAI?s basic principle of extending the reach of telecom network to uncovered villages it has turned down the regulators? suggestion to make geographical coverage a parameter for fulfilling the roll out obligations. It has asked the Universal Services Obligation administrator to redefine the roll out obligation to be followed by the operators to meet TRAI?s objectives.
On spectrum usage charge, the Telecom Commission noted that the current levy was not uniform and a rational levy needs to be evolved. Earlier, the TRAI had proposed to fix a uniform fee of 3 per cent of operators? annual revenue for the spectrum being used. The proposal was opposed by an internal committee of the Department of Telecommunication on the grounds that this would be against the rules prescribed in the notice inviting application for the broadband spectrum auctioned by the government in 2010. The Telecom Commission has asked DoT to discuss the matter with the Ministry of Finance.
While approving the policy for mergers and acquisition in the telecom sector, the Telecom Commission has taken a view that the three-year lock-in on promoters? equity should be dropped However, in case a player sells out its stake within the first three years of the merger of operations, then the DoT will collect a fee based on the valuation of the transaction.
The lock-in period was introduced to prevent non-serious operators from making windfall gains by selling spectrum at market price after acquiring spectrum from the government under the first-come-first-serve policy.
