02:03 pm - Saturday 18 November 2017

Telecom Commission asks for explanation from TRAI on reduction of spectrum pricing

By insightVAS - Fri Oct 04, 12:19 pm

Telecom Commission has asked for clarifications on sectoral regulator TRAI’s suggestions of a sharp cut in base price for spectrum auction. The inter-ministerial body will take the final decision on October 29 taking into account TRAI’s reply.

Telecom Commission also asked the regulator to recommend reserve price for the 800 MHz band, used by CDMA operators. The Telecom Regulatory Authority of India (TRAI) had recommended last month that there will be no auctions for this band.

Crucially, TRAI has recommended about 37 percent cut in base price for 1800 MHz band, compared to the reserve price in the auction held last November. For 900 Mhz, it recommended a reduction of around 60 percent. TRAI had justified reduction in spectrum reserve prices using various methodologies.

“By and large, we have gone through all recommendations. On some we have sought clarification and further views of TRAI,” Telecom Secretary M F Farooqui told. However, he added, “But don’t think that (just because) we have sought clarification means that we have not agreed.”

Stating that the Empowered Group of Ministers has decided to conduct the auction for 800 Mhz band, the Telecom Commission has sought recommendations for the reserve price.

Farooqui said TRAI has only recommended that DoT should explore possibility of EGSM. “We have asked price of 800 MHz that was a decision of the EGoM.” TRAI has suggested that there should be no auction for the 800 MHz spectrum as of now since there was no demand for these radiowaves in the auction last year, and only one company participated in March 2013 auction.

The Commission also questioned TRAI’s recommendation on reducing the upper limit of spectrum usage charge (SUC) from 8 percent to 5 percent.

Farooqui said: “We have requested TRAI whether we need to examine this with the backdrop of revenue neutrality, which is important for the government. At a different point of time when it (spectrum) was taken, what was condition in the NIA, would it be legally tenable.”

Commission has also asked the regulator to elaborate its recommendation on spectrum trading.

“We have asked for some clarification, largely for example when they say it will be only when they purchase (spectrum). What is that they have in mind. Specifically the other instruments that they want to explore,” Farooqui said.

The government has to conduct the third round of spectrum auction following a Supreme Court order in 2G case directing that all the radiowaves freed from the cancellation of 122 licences in February 2012 should be auctioned. Another set of auction for 900 Mhz has to be conducted as some of the radiowaves in this band are held under old telecom licences which will start expiring from November 2014.

The government expects to garner around Rs 11,000 crore from the spectrum auction.

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