PMO suggests referring 2G issue to EGoM

Amid  divergent views expressed by various stakeholders over TRAI's spectrum proposals, the Prime Ministers' Office has asked the DoT to consider referring the issue to the inter-ministerial panel handling 3G spectrum pricing.

"It may be desirable to take a decision on the recommendations after ensuring full deliberations on all aspects.

Against this background, the Department of Telecom is advised to consider widening the mandate of the Empowered Group of Ministers to also include taking a view on the TRAI recommendations," PMO said in a communication to the DoT and sought an early response. Meanwhile, the DoT has set up an internal panel for examining the proposals.

The PMO fears that strong and divergent views of the stakeholders over TRAI's Spectrum Management and Licencing proposals could lead to 'potential' controversies.

The EGoM, that the PMO suggests should look into the TRAI proposals, was constituted to resolve the battle between the DoT and the defence ministry on vacation of 3G spectrum for auction and its pricing. The panel was headed by Finance Minister Pranab Mukherjee.

On May 11, TRAI proposed that operators holding spectrum beyond 6.2 Mhz made an additional one-time payment for it. At present operators get additional spectrum based on subscriber base.

The pricing for 2G spectrum, as per the regulator, should be linked to 3G pricing. This antagonised GSM players who mostly hold over 6.2 Mhz in many of the circles.

TRAI also lowered the overall spectrum cap to 10 Mhz maximum from the current 15 Mhz.

TRAI also suggested refarming of 900 MHz spectrum, which was allocated to GSM players like Bharti Airtel, Vodafone, Essar and Idea.

A 900 MHz network is preferred to 1800 Mhz by operators as it offers huge savings on cost and better service to the end customer.

Top GSM players have been wary of the proposals because if the recommendations are accepted by the DoT, they would have to fork about Rs 20,000 crore for keeping spectrum beyond 6.2 MHz.

Of all the TRAI proposals, linking of 2G spectrum with 3G auction price drew the maximum flak as the GSM industry feels 2G and 3G have different functionality.

TRAI also proposed that operators pay market rates for spectrum when their licences came for renewal for 10 years from 2014 onwards.