The Telecom Commission has proposed to adopt an auction route for discovering the price of 2G spectrum. This is in contrast to the formula suggested by the Telecom Regulatory Authority of India (TRAI) that all operators having more than 6.2 MHz in a circle should be charged with a one-time fee.
The move comes after operators had written to the Ministry of Telecommunications and IT expressing their concerns over TRAI?s proposal of charging Rs 45.71 billion per Mhz on a pan-India basis. The regulator has further suggested that the calculations must be done on a pro rata basis for the remaining period of the licence.
According to sources, the Telecom Commission has recommended that all spectrum allotments beyond 4.4/2.5-Mhz will be charged at market price, both from existing as well as new allottees, and the price for spectrum in the 800 MHz and 900 MHz band will be 1.5 times the price determined through auction route.
Recently, the Telecom Commission had taken a decision on TRAI’s recommendations with respect to uniform licence fee and merger and acquisition-related issues. Currently, the operators are charged in the range of 6 per cent to 10 per cent, depending upon the service and circle of operation. The Commission has accepted TRAI?s proposal of charging a uniform licence fee at 8 per cent of operator?s adjusted gross revenues. TRAI’s proposals on mergers and acquisitions (M&A) have also been accepted. TRAI had recommended that M&A will be allowed as long as the merged entity’s market share does not cross 35 per cent. However, for cases where the market share of merged entity is more than 35 per cent, appropriate guidelines will be framed in consultation with TRAI. Post-merger, an entity will not be permitted to hold more than 25 per cent of the total spectrum in a given service area.
