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'The govt did not seek views on grant of new licences'

business Updated: Feb 23, 2012 12:53 IST
Manoj Gairola
Manoj Gairola
Hindustan Times
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In its verdict on cancellation of licences, the Supreme Court has pointed out that the recommendations of the Telecom Regulatory Authority of India (Trai) were “flawed in many respects”. Nripendra Misra, who was the chairman of Trai when the regulator's recommendations were submitted to the Department of Telecommunications (DoT), talks to HT about his view on the verdict. Excerpts:

What are your views on the Supreme Court’s observation that “the recommendations made by Trai were flawed in many respects and implementation by the DoT resulted in gross violation of the objectives of NTP 1999”?
I respect the judgment of the Supreme Court as it will ensure transparency and eliminate the regime of command and control. However, I would like to clarify that Trai in its recommendation of August 28, 2007 (para 2.72) clearly recommended for determination of market price — “the allocation of spectrum is after the payment of entry fee and grant of licence. The entry fee as it exists today is, in fact, a result of the price discovered through a market-based mechanism applicable for the grant of licence to the fourth cellular operator. In today’s dynamism and unprecedented growth of the telecom sector, it needs to be re-assessed through a market mechanism.”

Under UASL licence, the spectrum is coupled with the licence and is accordingly provided in terms and conditions of licence. It specifically refers to allotment of spectrum in 800, 900 and 1800 MHz bands.
Thus it is evident that the price of spectrum is captured in the entry fee of licence. It is because of this reason and level-playing field considerations that separate auction for 800, 900 and 1800 MHz band was not recommended for auction.

You have been maintaining that the DoT did not seek Trai recommendations before issuing new licences. Please explain.
The Trai Act mandates that the government shall seek recommendation of Trai on the "need and timing of new service provider and terms and conditions of licence to a service provider".

In spite of repeated references, the government did not seek any recommendation regarding the grant of new licences. Instead, the government disagreed with the viewpoint of Trai in writing.

What about licences issued by the DoT on first-come-first-serve (FCFS) basis when you were the secretary?
The grant of licences in 2003-2004 was in accordance with Trai recommendation where it was confirmed that the price determined during the auction of fourth cellular operation should be the only criterion.