DoT panel against rural rollout rider | india | Hindustan Times
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DoT panel against rural rollout rider

A committee of the department of telecommunications (DoT) set up to consider the recommendations of the telecom regulatory authority of India (TRAI) on auction of spectrum has suggested that the government refrains from imposing rural roll out obligations on the companies that acquire spectrum through auction.

india Updated: May 22, 2012 20:38 IST
Manoj Gairola

A committee of the department of telecommunications (DoT) set up to consider the recommendations of the telecom regulatory authority of India (TRAI) on auction of spectrum has suggested that the government refrains from imposing rural roll out obligations on the companies that acquire spectrum through auction.

A DoT source said that the committee has also recommended that the reserve price of spectrum be raised from R3,622 crore per MHz to above R4,200 crore per MHz.

The report of the committee, under member (technology) of the Telecom Commission, will be placed before the commission on May 24.

In its recommendations on spectrum auction, TRAI had said that it should be made mandatory for all telecom service providers to establish networks in rural areas; it had even suggested a time frame for this.

Telecom service providers opposed this provision and said that companies that bag spectrum in the auction should be allowed to set up networks as per their business plans. The cost of setting up telecom infrastructure in the hinterland is high and returns low, so companies from rural services.

The committee has also recommended increasing reserve price of spectrum. TRAI had recommended a 10-fold hike in the price of spectrum from its earlier price. Now, the DoT committee has suggested that it be increased further to R4,200 crore per MHz.

The teelcom operators have opposed this move on the grounds that buying spectrum at high costs would make their operations unprofitable, and for new operators, the gestation period would be prolonged.