If the Telecom Regulatory Authority of India (TRAI) proposal on re-farming the 900 MHz band are accepted, then as per the industry estimates, telecom companies would be forced to write off Rs 250 billion worth of equipment and make an additional investment of Rs 1250 billion.
TRAI?s recommendations on spectrum re-farming have been questioned by several service providers including Bharti Airtel, Vodafone India and Idea Cellular.
In fact, prior to this, the chief executives of the GSM majors met Kapil Sibal, Minister of Communications and IT, to highlight their grievances with the regulatory body?s new recommendations.
During this interaction, the officials highlighted several flaws in the regulator’s calculations of arriving at the high base price of Rs 36.22 billion per unit of spectrum at the all-India level – which was 13 times more than the price they paid for getting the same licences in 2008.
The executives also stressed that TRAI?s assertion that tariffs would witness a marginal increase of Re 0.02 per minute is incorrect. Instead tariffs would rise by as much as Re 0.30 per minute. Also, in some service areas, the call rates will double due to the high reserve price.
Now, Sibal has asked the operators to explain the impact of these proposals on a circle-wise basis.
