Trai won't heed lobbies, sticks to guns on lower spectrum price

New Delhi: The indomitable Rahul Khullar has refused to bow to telecom lobbies. In a hard hitting response to the Telecom Commission’s reference to TRAI, he has refused to make any alteration to either the base price for upcoming spectrum auctions for 2G airwaves or to any of the methodologies used in arriving at the price. The Telecom Commission had raised multiple queries over the method used by TRAI to recommend a substantial reduction in base price for upcoming auctions.

Last month, TRAI had recommended about 37 percent cut in base price for 1800 Mhz spectrum band compared to the reserve price in the previous auction. This is the steepest price cut so far after 122 telecom permits were cancelled by the Supreme Court and telcos obviously cheered this recommendation. For 900 Mhz, TRAI had recommended a reduction of around 60 percent but this price was calculated for only three circles.

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[caption id=“attachment_1095013” align=“alignleft” width=“380”]  The regulator had not recommended any price for 800 mhz band which is used for CDMA services and had also suggested that no spectrum be reserved for incumbents while refarming of the 900 mhz band. PTI.[/caption]

The regulator had not recommended any price for 800 mhz band which is used for CDMA services and had also suggested that no spectrum be reserved for incumbents while refarming of the 900 mhz band. The Telecom Commission, which wanted to know a pan-India base price for 800 mhz airwaves, asked some uncomfortable questions on refarming and sought a justification for lowering the 1800 mhz base price.

Khullar has got back without making a single change to his initial recommendations. He has stuck to the reserve prices and to his suggestion that no auction is required in the 800 mhz CDMA band and that no spectrum should be reserved for incumbent telcos while refarming of 900 mhz.

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“Since the recommendations on reserve prices for different LSAs follow, in logical sequence, from the valuations obtained through adoption of different methodologies, there is no scope at all for the Authority to “reconsider” the reserve price, as suggested by the DoT. The Authority, therefore, reiterates its recommendations on the reserve price of 1800 MHz spectrum for different LSAs,” TRAI said in its response.

The regulator has also refused to ease roll out obligations for telcos, sticking to its earlier stand. But more importantly, it has refused to budge over the spectrum usage charge issue too - something over which large sections of the telecom industry had been agitated.

GSM lobby group Cellular Operators Association of India (COAI) had supported a uniform spectrum usage charge of three per cent of adjusted gross revenue of the operators saying this would create a level-playing field for all the operators in the country.

But Reliance Jio Infocomm had opposed this, saying the proposal was against the rules specified at the time of auctioning broadband spectrum in 2010. Trai had recommended 3% SUC for the BWA spectrum holders considering the recent decision of the Government to allow BWA spectrum holders to offer voice services using the spectrum they currently hold.

Existing voice service operators pay 8% as spectrum usage charge.

Now that TRAI has not amended a single important recommendation spectrum pricing, the Telecom Commission will take a final decision on October 29 before sending its recommendations to the Empowered Group of Ministers.

Spectrum auctions are slated to be held in January next year.