Trai stands by its spectrum suggestions, tariff may go up

Mobile tariffs could go up in the near future as the Telecom Regulatory Authority of India (Trai) today stood by its recommendation of over six-fold jump in 2G spectrum price.

Since most of the incumbent operators will have to renew their licences in the next 3-5 years, they might have to shell out Rs Rs 10,972.45 crore for acquiring start-up 2G spectrum as against to Rs 1,658 crore paid earlier.

Trai has sent back its recommendations to the Department of Telecommunications (DoT) which had sought clarifications from the regulator before finalising the National Telecom Policy 2011.

With regard to one-time charge for additional spectrum beyond the contracted limit of 6.2 MHz, Trai has left it to the government to take an appropriate decision.

In its response to DoT, Trai said "...Should the government decide to charge the spectrum beyond the initial spectrum [6.2 MHz] by way of amending the licence conditions, the current price would be what has been estimated by the experts" which is Rs 10,972.45 crore for pan-India licence.

In its recommendations earlier this year, Trai had said that each MHz of additional spectrum, after the 6.2 MHz limit, held by operators should cost one-time Rs 4,571.87 crore (all-India).

However, it would vary from circle to circle and the operators would have to pay only for those where they hold extra spectrum.

According to Trai recommendations, all licencees would have to pay for spectrum at the current price at the time of renewal of licences, or else at price to be discovered through auction or any other market-driven mechanism.