Vodafone asks government to reject Trai's 2G proposals

Vodafone Essar has asked the department of telecommunications (DoT) to reject the recommendations of the Telecom Regulatory Authority of India on spectrum management and related licensing issues, terming these retrograde and perverse.

“It is apprehended that the Trai recommendations, if accepted, will lead to many investors rethinking their business plans and prospective investments in Indian telecom. This will place a critical and performing industry in jeopardy and seriously undermine the goal of extending telecom and mobile broadband services to the poorest across the country,” the company’s resident director (regulatory affairs & government relations), T V Ramachandran, said in a letter to communications minister A Raja.

Vodafone requested the minister to see the proposals were rejected. All Trai proposals need DoT approval. Earlier in the day, Raja told reporters all stakeholders would be consulted before any final decision.

Vodafone’s letter comes after all the major GSM and CDMA operators, including Tata Teleservices and Bharti Airtel, have strongly opposed the recommendation to charge incumbent telecom operators a one-time fee for holding 2G spectrum beyond 6.2 Mhz.

For spectrum beyond the contracted 6.2 Mhz in their possession, the Trai wanted operators to pay a one-time fee based on prices of 3G spectrum, the auction for which is currently on. Bharti, Vodafone Essar, MTNL and BSNL hold over 6.2 Mhz of spectrum in many of the circles.

“Application of super 3G prices will make the 2G business case absolutely unworkable and make it impossible to provide affordable 2G services,” the letter added. It also said the recommendations have caused much negative sentiment in the market and already led to a loss of confidence amongst investors.

However, in another development, Etisalat DB, a new telecom service provider, hailed the Trai recommendations. It said the proposal to charge mobile players with spectrum beyond 6.2MHz would narrow the existing non-level playing field.

“Trai recommendations establish the fact that all service providers require a minimum of 6.2 MHz, which is also the contractual spectrum as per the licence and to this extent, Trai has rightfully recommended narrowing the gap in the existing non-level playing field, which was created by historical policy anomalies,” the company said in a statement.