The department of telecommunications (DoT) may push for a reserve price of Rs 10,000 crore for 5Mhz of spectrum, nearly half of the what the regulator had recommended.
The DoT’s reserve prices, if accepted by the empowered Group of Ministers (EGoM) on Monday, will net the government nearly Rs 3.15 lakh crore less that it what could have potentially earned over 10 years, if the Telecom Regulatory Authority of India’s (TRAI’s) recommendations were accepted. TRAI has favoured a reserve price of Rs 18,000 crore for 5MHz of spectrum in 1,800-MHz band, at which the government can potentially nearly Rs 7 lakh crore over a 10-year period.
During the current financial year ( 2012-13), DoT’s proposal, if the agriculture minister Sharad Pawar-headed panel approves it, will fetch about Rs 35,000 crore against Rs 63,000 crore that the government can earn by selling the scarce radio waves at TRAI-proposed prices.In February, the Supreme Court had ordered cancellation of 122 telecom licences awarded in 2008.
The 2G telecom spectrum scam is arguably the most high-profile corruption case in Indian history — valued at as much as Rs 176,000 crore by the Comptroller and Auditor General, strikingly similar to TRAI’s reserve price valuation.
Telecom firms, it was alleged, were awarded licences arbitrarily and granted 2G spectrum at cheap rates, robbing the government of revenues. The government has time till August 31 to auction spectrum and complete the allocation.
The issue has assumed strong political overtones.
BJP national spokesperson Rajiv Pratap Rudy has warned the government against reducing the prices recommended by TRAI.
“If reserve price is lowered, it will encourage cartelisation by the bidders. This will impact the revenue that government would have earned,” said Rudy. “We apprehend that by lowering the reserve price, the government may try to prove that the revenue losses calculated by TRAI were only notional. This will also lead to supporting communications minister Kapil Sibal’s zero-loss theory, and may result in another scam,” Rudy said.
Samajwadi Party chief Mulayam Singh Yadav has also written to the Prime Minister Manmohan Singh supporting TRAI recommendations.
“TRAI and DoT’s internal committee shows that neither would there be any adverse impact on telecom operators on account of this fee nor there would be any significant increase in tariff,” said Yadav's letter.
Private operators have opposed TRAI’s recommendations arguing that such high prices will push up tariffs and hurt subscribers.
According to TRAI, tariffs will rise by just four paise per minute, while operators said it could even double in some circles.
Rajeev Chandrasekhar, Rajya Sabha MP and former chairman of BPL Cellular, charged operators of shying away from paying spectrum fee to the government. “I find it very strange that the government can intervene in a regulator’s recommendations without providing any justification or evidence to contradict the regulator,” he told Hindustan Times.