DoT panel likely to accept Trai's spectrum pricing 'points'

Report by DoT committee will be discussed at Telecom Commission and finally placed before empowered group of ministers

The Committee of the Department of Telecommunications (DoT), which is examining the recommendations of the Telecom Regulatory Authority of India (Trai) on the spectrum pricing, is expected to  broadly accept the recommendations on pricing of spectrum in 800MHz, 900MHz and 1800MHz bands. Instead it has decided to note the various objections raised by telecom companies.   

 “As of now, the committee is unlikely to suggest any major change. But it will take note of all the relevant suggestions of the industries bodies. However, there will be a few more meetings before the Committee submits its report. ” said a senior DoT official.

DoT has formed a nine member Committee to hold detailed deliberations on Trai recommendations. The Committee is expected to submit its report within a week after Trai submitted its recommendations. The report will then be discussed in the Telecom Commission and finally placed before the empowered group of ministers.  

The Trai had recommended a reduction in the base price of 1800 by 37 per cent and upto 60 per cent in 900 Mhz in the circles of Delhi, Mumbai and Kolkata which come for auction next year . However it has said that CDMA operators have enough spectrum in the 800 Mhz band and the extended GSM band should be also offered for auction with 900 Mhz.  

The regulator has however rejected the demand of the GSM operators for reserving at least 5Mhz in the 900 Mhz band for incumbent operators, and has recommended that all the spectrum should come for auction.    

The  Association of Unified Telecom Service Providers of India (Auspi), which bats for the CDMA operators in India, has said that if the Government decides to take spectrum out from the 800MHz band for the proposed extended GSM band it would kill the growth of  CDMA operators.

The GSM operator have demanded a further reduction in the base price which has been pegged at 80 per cent of the valuation price, and have said that without reservation of spectrum in the 900 Mhz band they will have to make huge investments to shift their subscribers to 1800 Mhz band in case they do not get the requisite spectrum in auction.

The regulators decision to have a uniform 3 per cent spectrum usage charge instead of a myriad of rates has been opposed by Reliance Jio Infocomm which has said that this would be unfair on the 4G operators as its SUC charges will go up from the current 1 per cent.

Trai has recommended the three per cent spectrum usage chares for the BWA spectrum holders considering the recent decision of the Government to allow BWA spectrum holders to offer voice services using the spectrum they currently hold. On the other hand, the existing voice service operators pay eight per cent as spectrum usage charge.

 
In a recent interview to Business Standard, Trai chairman Rahul Khullar had said that the CDMA operators with 5MHz or 3.75MHz of airwaves in the 800MHz band are more than adequately capable of dealing with their customers.

The regulator has further said that its approach was to realize the maximum opportunity cost of 800MHz spectrum. The proposed extended GSM band would make space for more than three operators in each circle after refarming and the spectrum can be sold at three to four times value of the 800MHz band, Khullar had said.

“When there is a scope for the Government to get a better value of the spectrum, it should go for that. As seen in the previous auctions, there is not much demand for the CDMA spectrum,” said the source.

Cellular Operators Association of India (COAI), which lobbies for the GSM carriers, has opposed the Trai proposal to abolish reservation of spectrum in the 900MHz band and put the entire spectrum on auction.

COAI has suggested that the Government should ensure 5MHz of spectrum for the two incumbent GSM operators in the 900MHz band at the market determined price in Delhi, Mumbai and Kolkata circles, and put the remaining spectrum on auction.