Vodafone Essar, in its letter to Kapil Sibal, Minister of Telecommunications and IT, has recommended anchoring the NTP-2011 on a four-point agenda and formulating a spectrum reforms policy that is based on public interest and ensures the most transparent, optimal and efficient use of this scarce resource. This can be achieved by:
Auction method for allocation of spectrum
No such thing as contracted spectrum and one-time licence fee
Under the current licence conditions, there is no limit of 6.2MHz. Hence it is erroneous to refer to it as ?contracted spectrum?. On this issue, TDSAT has dismissed a petition in December 2010 that GSM operators held spectrum beyond contracted limits.
There is no provision under our licenses for payment of any one-time fee for allocation of additional spectrum and any such provision cannot be unilaterally and wrongfully thrust on us.Pricing of spectrum to be fair, consistent and transparent in NTP-2011
Ensuring all future spectrum (beyond current holdings) is allocated through auctions as it is most optimal and efficient.
Auctions will introduce a consistent approach to pricing of spectrum rather than radically different approaches to charging for spectrum and despite the fact that all operators compete in the same market. The inconsistent and illogical nature of TRAI?s recommendations is evident from the fact that:
The price of 1800MHz spectrum varies from Rs 2.68 billion/MHz to Rs 59.43 billion/MHz, a differential of 2,200 per cent, with the differential going up to 3300 per cent in case of pricing for 900MHz spectrum.
TRAI has allowed a 2001 price for spectrum allocated in 2007-08 but recommended a 2010 ?value? to spectrum allocated in 2002-06
TRAI has allowed spectrum to be priced at 2001 rates for dual spectrum operator and the 2008 licensees despite its own report that concludes the price is nearly seven times higher (Rs 17.70 billion/MHz)
TRAI has allowed a price of Rs 2.67 billion/MHz for spectrum allocated in 2007-08, but recommended a ten times higher price of Rs 27.85 billion/MHz (assuming 12 per cent inflation) be paid for license/spectrum renewal in 2014/15
TRAI has recommended a price for 2G spectrum (above 6.2MHz) that is 36 per cent more than 3G spectrum
Auction is the most suitable solution in the current scenario as any administrative/other approach sought to be adopted by the Government will undoubtedly run into roadblocks. This is because auction will overcome the delays in spectrum allocation due to legal disputes on the priority in which spectrum should be allocated to competing operators.
Auction will also unlock the huge revenue opportunity of the spectrum lying unutilised with DoT.
Uniform and Non-discriminatory spectrum usage charges
Replacing the escalating charges regime with a uniform spectrum usage charges regime to address the anomaly where performing operators are punished for growing the market and connecting the unconnected.
Uniform charges will address the anti-competitive situation of differential and discriminatory application of usage charges on similarly placed operators. The dual spectrum operators despite holding equivalent or more spectrum, pay a fraction of the spectrum usage charges paid by the GSM players.
Uniform charges will also ensure that in case the spectrum is to be allocated through auctions, all bidders compete and bid on equal terms.
Robust Regulatory framework that is fair, consistent and transparent
Ensure a robust regulatory framework anchored on the principles of simplicity, clarity, consistency, transparency and fairness.
This is essential to ensure sustained confidence of stakeholders which, in turn, is imperative to facilitate the heavy investments that are so necessary for this highly capital intensive industry.
Clarity on jurisdiction and role of the TRAI and TDSAT
NTP-2011 must clarify the jurisdiction and role of each of TRAI and TDSAT ((especially in matters related to interconnection) and each body itself must have a fair and transparent decision making system.
