A committee set up by the Department of Telecommunications (DoT) to examine the recommendations made by the Telecom Regulatory Authority of India (TRAI) on spectrum pricing and allocation has rejected or sought review of the key proposals.
In a 38-page report, the panel has asked DoT to seek a review of TRAI?s recommendations, including giving first priority to operators who already have start-up spectrum.
While the panel agreed to TRAI’s suggestion to charge a one-time fee from operators with more than 6.2 Mhz spectrum, it has stated that the calculations used by the regulator to arrive at the charges were based on assumptions and were contradicting.
TRAI has suggested that GSM players with more than 6.2 Mhz spectrum should pay Rs 17.69 billion per Mhz pan India.
The DoT panel felt that TRAI made several assumptions while determining the pricing and may thus reconsider. The panel has also asked for a similar pricing structure for CDMA operators holding excess spectrum.
On the issue of the implementation date, the panel has suggested that TRAI may recommend a per Mhz price every year by December 31, 2011 which will be valid for the next financial year.
The panel has also rejected TRAI’s suggestion to change the rules pertaining to roll out obligations, since most of the operators have already completed the current obligations.
TRAI had also suggested that all operators be brought under a unified licence regime with a uniform licence fee, which will be brought to 6 per cent of the operator’s revenues over a four-year period. The DoT panel has, however, pegged this at 8.5 per cent, to protect Government income.
On the issue of allocation, TRAI had said that operators who have already been given start-up spectrum should be given additional spectrum first and the operators who are yet to get start up spectrum should be of last priority.
However the DoT panel has suggested the opposite, with priority given to operators who have not received any spectrum.
The panel has, however, agreed to most of TRAI?s suggestions on mergers and acquisitions (M&A). TRAI had suggested that M&As will be allowed only if the merged entity’s market share is not greater than 30 per cent of the total subscriber base. No M&A activity will be permitted if the number of operators in a circle falls below six.
The panel’s views, along with TRAI?s proposals have been sent to the Telecom Commission for a final view. Thereafter, the policy will be sent to the Cabinet for ratification.
