TRAI aims at Rs.300,000 crore revenue from spectrum refarming

TRAI’s latest recommendations, although pretty disliked by many, if implemented could help the government earn revenues amounting to a staggering Rs.300,000 crore from refarming of the spectrum. A letter written by the Telecom Regulatory Authority of India (TRAI) to the secretary of the Department of Telecommunications (DoT) states that by refarming, the government can realize the true value of spectrum in the precious 900MHz and 800 MHz bands, reports Hindustan Times. The older existing operators hold spectrum in these bands and TRAI has recommended that 900MHz and 800MHz bands should be replaced by 1800MHz and the vacant bands be auctioned, which will account to the aforesaid sum in over four years. 

“The Authority would however like to underline that spectrum required for refarming be set aside since the value to be realised from the auction of 800 and 900 MHz spectrum is very large — of the order of Rs. 3 lakh crore at the reserve price — besides involving issues of level-playing field,” said a recent letter written by TRAI secretary to DoT secretary. 

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Large revenue for the government…

Auspi (Association of Unified Telecom Service Providers of India), which represents CDMA and dual-technology mobile operators, like Sistema Shyam, Reliance Communications and Tata Teleservices has revealed that the reserve price recommended by the regulator for auctioning the 800MHz airwave band could lead to doubling of call tariffs. TRAI has also been receiving opposition from  COAI and telcos also put forth that this may lead to  increase in the tariff. 

The letter also reveals that if the government doesn’t refarm the spectrum now, then it will be stuck for another 20 years. “In the present situation, we have sufficient spectrum to carry out the refarming exercise which has been accepted in principle and any failure to do so at this stage would result in our not being able to do the refarming for ever or at least for next 20 years. It would be a case of a precious opportunity lost if we were not to do the refarming at this stage,” said the letter.  Another report says that if the government adheres to TRAI’s recommendations, major telecom providers, such as Bharti Airtel Ltd and Ideal Cellular Ltd, will have to pay Rs 1.25 trillion on their networks.