Market forces should determined 2G license fee: Trai

Telecom Regulatory Authority of India (Trai) today reiterated that the licence fee for 2G spectrum should have been determined by market forces. Speaking at  the sidelines of a conference, Nripendra Mishra, Chairman, Trai said: “We have said, a mechanism to be evolved for license which must capture the market price.”
 
However, he admitted that auction of 2G licence was not possible, “Because  the spectrum is bundled in the licence of 2G therefore it wasn’t feasible to auction 2G so the licence had to capture the market prices and other things.”

Distancing himself on the arguments raised regarding licences being given at a cheaper rate than what the government could have earned.

Certain things according to developments that have taken place there is a feeling that there was a need to capture more revenue in the interest of the government. Now a thought has to be given by Department of Telecom (DoT). So, it is the domain of  the DoT.

He also said that the recommendations should not be used out of context.

He said, “All that we’re saying if our recommendations of 2007 have to be referred then they have to be read in totality.”

Section 2.73 of Trai’s recommendations of 2007 states, "In today's dynamism  and unprecedented growth of telecom sector, the entry fee determined then  (2001) is also not the realistic price for obtaining a licence. Perhaps, it needs to be reassessed through a market mechanism."
 
He further said that given the developments that have taken place over the  years the DoT has to take a call as to how its can get more leverage out of the revenues. He said, “If there is development and if the DoT reaches a conclusion that there is a need to increase the revenue to the national exchequer then they will have to find ways.”