The Planning Commission is to suggest a pricing formula and method of reallocation of spectrum once the tenure of existing licences expires. The Department of Telecommunications (DoT) has forwarded the suggestions of the Telecom Regulatory Authority of India (TRAI) on spectrum management and licensing framework to the commission for feedback.
Kapil Sibal, Minister of Telecommunications and IT had recently announced that telecom licences will be renewed for a 10-year-period and added that companies must submit applications for new permits at least 30 months prior to the expiry of their licences. About 11 mobile phone companies will have to renew their permits between 2014 and 2021.
The commission will also take stock of the recommendations of the report which include issues such as linking prices of 2G spectrum with those of 3G spectrum and taking back spectrum held by operators and relocating it more efficiently.
The study was done while A. Raja was the telecom minister and had suggested putting a limit on the amount of spectrum an operator can hold and asked companies to pay a one-time fee for holding excess spectrum. However, TRAI has come out with a fresh set of recommendations recently on spectrum pricing, while adding that it would soon suggest a method of pricing of airwaves when mobile permits are renewed.
The regulator asked the government to impose a one-time pan-India fee of Rs 45.72 billion for every unit of spectrum operators hold beyond the contracted limit.
New operators, including dual technology companies who were given mobile permits in 2008, have been given only 4.4 MHz of startup spectrum. TRAI has not recommend pricing for additional airwaves be applied for spectrum beyond the 4.4 MHz mark for these companies, it, however, said that every unit of airwaves between 4.4 MHz and 6.2 MHz could be valued at Rs 17.70 billion (pan-India).
Sibal had recently said the ministry will charge mobile operators for additional spectrum at market-determined prices beyond the 4.4 MHz mark, indicating that companies such as Reliance Communications and Tata Teleservices Limited will also have to pay up.
The Planning Commission is expected to come up with a methodology of pricing and re-allocation that will be considered by an internal committee within DoT.
