GSM cos cry foul on Trai's spectrum proposals

Fearing a massive additional-outgo towards spectrum for their existing services, top mobile operators Bharti, Vodafone and Tata Tele today said regulator Trai's recommendation was "arbitrary" and "retrograde".

Anil Ambani-led Reliance Communications (RCom), the second-largest mobile operator, was the only one to welcome the regulator's recommendation that operators should pay for 2G spectrum (radio waves) on par with 3G rates.

The government as recently as two years ago gave away pan-India 2G spectrum at Rs 1,651 crore, compared to 3G that has so far attracted a bid of over Rs 14,000 crore, and the quotations could go up further by the time the auction closes.

Those who are opposed to the recommendations argue that implementation of this would hurt the consumer hard.

"The latest recommendations by Trai for allocation of 2G spectrum are shocking, arbitrary and retrograde. They overturn all existing policies of the DoT of the last 15 years, recommendations made by various government committees and even Trai's own earlier recommendations," said Bharti, the country's largest mobile operator.

Trai yesterday said operators with over 6.2 MHz of spectrum will have to pay for the additional radio waves they are holding at the current market price, which will be linked to the 3G price.

If implemented, this will be a big blow to GSM players like Bharti Airtel, Vodafone Essar and Idea that have well over 6.2 MHz of spectrum and will have to cough out more to retain the additional radio waves.

Vodafone Essar said the proposals are retrograde for the industry and against the interest of consumers.

"VEL is deeply concerned that the Trai recommendations have deviated fundamentally from the holistic, forward looking spectrum reform framework recommended by the Expert Committee set up by DoT that Trai was tasked with considering," it said.

Marten Pieters, managing director, VEL said: "The telecom industry has seen very little revenue growth in the last 6 quarters, and has been impacted by unprecedented price wars."

Bharti's stock fell 8.29 per cent to close at Rs 261 on the BSE today, following Trai's recommendations. SingTel owns 32 per cent in Bharti Airtel. VEL is not listed.

On the other hand, RCom said the proposal are progressive and consumer-centric.

"Trai recommendations would lead to spectrum efficiency and rural penetration. The government would be able to release additional spectrum," Syed Safawi, CEO, wireless business, RCom said in a conference call.