Trai dismisses old GSM operators' loss concerns

Telecom regulator Trai today dismissed GSM operators' charges that its recommendation to revise 2G spectrum prices will hit them hard and said they (telcos) were looking at the issue from a narrow perspective.

"Telecom firms should not look at only payout charges. This is just one element of the recommendations. There are other elements which will result in huge savings for the operators," Trai Chairman J S Sarma told reporters.

Trai has recommended fixation of uniform licence fees at 6% of Adjusted Gross Revenue (AGR) over a period of time, compared to 6-10% now, depending upon the circles, he said, adding that, "We have also recommended rationalisation of annual spectrum charges."

Sarma's comments came after incumbent GSM operators like Bharti, Vodafone and Idea Cellular and new service providers like Tata Docomo and Reliance Communications attacked Trai for coming out with "irrational and discriminatory" recommendations on spectrum prices.

In fact, both factions -- new and old GSM service providers -- accused Trai of making recommendations that benefited the other.

The new operators termed Trai's recommendation as a complete sell-out to old GSM players, saying the extra spectrum hoarded by old operators would be legalised at a fraction of the actual cost.

They said that the operators should be asked to return the extra airwaves or else there should be a recurring cost and not a one-time entry fee, as proposed by Trai.

In contrast, Vodafone Essar said TRAI's new set of recommendations are flawed, illogical and discriminatory against the operators that were the first to invest deeply to build the sector.

Similarly, Bharti also said that, "The recommendations by Trai goes against the stated principle of the government to offer affordability, fairness and a level playing field. There seem to be huge inconsistency in terms of the differences of prices in various circles, which defies logic."

TRAI said that taking all elements of its recommendations in totality, the operators would actually save money over the licence period.

Besides lowering licence fees and rationalisation of spectrum charges, Trai is also in favour of lowering operators' contribution to the Universal Service Obligation (USO) fund, a levy which is used to subsidise operators to offer services in rural areas and villages.

TRAI's Sarma urged the operators to look at all elements of its recommendations collectively and not selectively, on the basis of spectrum prices alone.