Tata Tele suggests formula for pricing excess spectrum

Tata Teleservices has suggested that the price of each MHz of excess spectrum beyond 6.2MHz in the 1800 Mhz band should be 1.67 times the 3G price set through the recent auction. And, for excess spectrum in the 900 MHz band, the price should be 2.67 times that of the 1800 MHz band.

The company was responding to the Telecom Regulatory Authority of India’s request for inputs on linkage of 3G prices to the current price of spectrum, it said in a statement.

The date of charging should be from the date of allotment of the excess spectrum. The company also recommended levying of 12 per cent compound interest on the excess spectrum charges from the date of allotment, it said in its response to Trai. State-run telecom majors BSNL and MTNL, as well as others such as Bharti Airtel, Vodafone Essar and Idea Cellular, hold spectrum beyond the contractual limit in many circles.

Trai had, in its recommendations in May, said the operators would need to pay for the excess spectrum beyond 6.2MHz as per the price discovered through the 3G auction. Second, spectrum in the 800 and 900 MHz bands should be refarmed and operators moved to a different band when their licences come for renewal.

These recommendations were strongly criticised by existing mobile operators, including Airtel, Idea and Vodafone. They would have to pay a huge amount if the Trai recommendations were accepted by DoT.

It had also started a controversy as experts and industry people feel the prices of 2G spectrum could not be linked with 3G, as these are two different technologies and 3G was thrice as efficient as the 2G frequency.

The regulator had asked for the comments of all service providers by June 15. However, according to reports, Bharti, Vodafone and Idea have refused to participate in the process. After receiving all the inputs, Teai would consult and come out with a final view on spectrum pricing and refarming by July 15.