Trai view on 800 MHz price looks realistic: M F Farooqui

Interview with Secretary, Department of Telecom

Last April, M F Farooqui took charge as secretary of the department of telecommunications (DoT), after two failed government auctions. Over the past year, there have been many regulatory changes in favour of the industry, leading to the most successful auction in recent years, adding Rs 61,000 crore to the state kitty. Pricing was realistic and cellular operators identified value in specific circles, he tells Sounak Mitra, as the DoT gets ready for auctioning 800 Mhz spectrum. Edited excerpts:

Trai (the sector regulator) has given its recommendations on the reserve price for the 800 MHz spectrum auction. When would it take place?

We have received its recommendations. The Telecom Commission (TC) would give its views and the matter then sent to the Empowered Group of Ministers (EGoM) on telecom. After EGoM approval, the notification will come. The timing will have to be decided.

The industry has opposed Trai’s suggested price. Do you thin the price is right?

M F Farooqui

The regulator has considered all parameters, including the recently concluded auction results, before giving its recommendations. Unlike earlier instances, we now have a successful auction that can be taken as a reference for determining reserve prices in accordance with market sentiments. Considering these, it looks realistic. But, the TC would give its views soon. In the coming rounds of spectrum auctions, we expect similar responses to what we got in the February auction.

Will DoT auction other bands with 800 MHz?

We need to auction the spectrum coming for renewal next year. But that might be a separate auction. This could take some time, as we’ll have to determine reserve price for all circles in the 900 MHz band. DoT will ask Trai for recommendations on this. The priority is to auction 800 MHz and the spectrum due for renewal next year.

While trading and sharing of spectrum is permitted in-principle in the new merger and acquisition (M&A) guidelines, DoT is yet to notify those for trading and sharing of spectrum. When is this expected?

We have the Trai recommendations and are working on the details. We expect to notify these early in the next financial year (which begins from April 1). Trading and sharing of spectrum is part of the overall scheme that allows its efficient use by operators, as spectrum is now delinked from licences. This is one route for getting more of it. We would ensure there is no possibility of arbitrage in acquisition through any route. Everybody should pay the market-determined price.

Have you worked out the spectrum usage charge (SUC) for sharing? The industry has asked for a weighted average mechanism.

This is something we are working on. There are various options. We are yet to finalise it but will ensure parity.

Some operators have said instant chat application services companies such as WhatsApp and Vibre need to be regulated and they should share revenue. Is DoT planning to bring them under regulations?

There is no plan and we don’t need to act on this now. If the issue appears at a later stage, we will look into it.