Incumbent, new telcos differ on Trai's spectrum pricing

The GSM operators today rejected Trai's recommendation on 2G spectrum prices saying it was like changing the goal posts in the middle of the game, while some of the new players said the proposal for additional spectrum favoured the incumbent service providers outright.

The Trai has recommended over six-fold increase in 2G spectrum prices for the contracted 6.2 MHz at Rs 10,972.45 crore for pan-India licence and one-time entry fee for additional 1 MHz of spectrum at the rate of Rs 4,571.87 crore on all-India basis.

The Cellular Operators Association of India (COAI) termed the new recommendations of Trai as "disastrous" for a majority of the operators.

Some of the new players, who did not wish to be identified, said this would legalise the additional spectrum hoarded by GSM players at fraction of a cost.

The contracted limit of spectrum is 6.2 MHz and the government must seek return of additional spectrum without any delay, they said.

More over, the price of additional spectrum is just one-time entry fee, whereas it should be recurring on annual basis, the new players said.

"The Trai's recommendations are like changing the goal posts in the middle of the game. We cannot go among subscribers and recover it," COAI Director General Rajan Mathews said.

"The assumptions used by Trai are open to question. They (Trai) have used very sophisticated mathematical modelling. It may take couple of weeks for us to understand but on the face of it, these look very disastrous for the industry," he added.

Bharti, BSNL, Vodafone and Idea Cellular hold extra spectrum beyond 6.2 MHz in various circles and would have to pay hefty one-time fee for this.

The Comptroller and Auditor General (CAG) had estimated nearly Rs 37,000 crore presumptive loss to the exchequer on this account.