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PlanCom fully backs Trai recommendations

Backs regulator's views on spectrum trading, uniform 3% spectrum usage charge

Surajeet Das Gupta & Sounak Mitra  |  New Delhi 

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In stark contrast to the Telecom Commission, the Planning Commission has fully endorsed the Telecom Regulatory Authority of India’s (Trai’s) recommendations on spectrum pricing.

It has said Trai’s calculation of the base price for 900M Hz and 1,800 MHz was based on a robust assumption, in line with international practice and should be accepted by the Telecom Commission.

It has also endorsed the regulator’s view on imposing a uniform three per cent spectrum user charge, as well as allowing spectrum trading and not undertaking an auction of the 800 MHz band. The Planning Commission has also strongly supported the regulator’s suggestion to permit spectrum trading.

However, the Telecom Commission, on Thursday, had decided to send all these key issues back to the regulatory body for reconsideration.

A top official of the Planning Commission says it was internally in favour of taking the package to the Empowered Group of Ministers (EGoM). Technically, if the department of telecommunications (DoT) has a concern or query, they have to revert to Trai. “We have no problem with them doing that and coming back to the EGoM, when we can take a view on the report as a whole,” said the official.

The view of the Planning Commission was made in September-end to the DoT, and it had requested these views be placed before the Telecom Commission at the October 3 meeting.

The plan body has argued that the Trai recommendation must be viewed as a package — covering spectrum trading, merger and acquisition (M&A) guidelines, sharing of spectrum, a flat regime for spectrum usage charge and a level playing field for rollout obligations for all service providers. It has argued DoT needs to take a view on these issues within the framework of the National Telecom Policy, 2012, well before an auction of the 1,800 MHz and 900 MHz bands is held.

Apart from M&A, the Planning Commission views spectrum trading as another way to realise consolidation in the sector and encouraging operators constantly to optimally use spectrum and overcome inefficiencies that arise after the initial allocation.

The Commission strongly believes Trai’s recommendation on spectrum trading be adopted and included in the auction design.

The TC’s decision was based on a report by a DoT committee, given on Tuesday. The DoT committee, in its report to the TC, has said the regulator should be asked to reconsider its views on a lower reserve price that it suggested for both the 900 MHz and 1,800 MHz abnds. It hsa said the valuation does not appear to reflect the value of liberalised spectrum to be auctioned in January.

The DoT committee had also rejected Trai’s recommendation to have a uniform SUC of three per cent. It has the issues can be examined only when all the operators hold liberalised spectrum. Besides, it has rejected the regulator’s suggestion to allow trading of spectrum, saying this could have unintended consequences and there should be a more comprehensive view.

First Published: Sat, October 05 2013. 00:27 IST
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