The Associated Chambers of Commerce of India (Assocham) has criticised the Cabinet’s decision on the reserve price of the spectrum in the 900 MHz band for the forthcoming spectrum auctions. The industry association has raised concern over the Cabinet?s final decision to peg the reserve price for 900 MHz spectrum above that recommended by the Telecom Regulatory Authority of India (TRAI). The association is of the view that such a pricing would not only affect the consumers who will face higher tariffs but also affect the government’s ‘Digital India’ initiative.
The cabinet has fixed a base price of Rs 39.80 billion per MHz of pan-Indian spectrum in the 900 MHz frequency band (excluding Delhi, Mumbai, Kolkata and Jammu & Kashmir circles), which is higher than that suggested by the Telecom Commission. The reserve price for the spectrum auction in the 900 MHz band in 17 circles has been increased by 32.5 per cent over what was initially recommended by TRAI. Consequently, this has translated into an increase of Rs 48.80 billion for 5 MHz blocks of spectrum in the 900 MHz band.
Further, Assocham has also raised concerns over the quantum and pricing of the spectrum in the 2100 MHz band being put up for sale in February 2015. The Department of Telecommunications is considering putting up only 5 MHz of 2100 MHz spectrum for auction in 17 circles. The industry association has added that the quantum put up for sale in auction is far lower than the 20 MHz of spectrum recommended by TRAI, which would lead to artificial scarcity to push up the prices. This will result in the diversion of the available financial resources majorly towards winning spectrum and would, in turn, impact the ability of the telecom companies to invest in the expansion and upgradation of their networks.
Meanwhile, Assocham believes that the 2100 MHz band is used for the provision of high-speed data services and its adequate viability will be critical for meeting the objectives of the ‘Digital India’ programme.
