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Government to sell spectrum at market price

The Centre on Saturday took a major step towards cleaning up the telecom sector, tainted by the 2G scam, by announcing that in future, telecom spectrum — the waves through which voice and data are transmitted — would be allotted to operators at market prices. HT reports.Wealth in waves

india Updated: Jan 30, 2011 01:44 IST
HT Correspondent

The Centre on Saturday took a major step towards cleaning up the telecom sector, tainted by the 2G scam, by announcing that in future, telecom spectrum — the waves through which voice and data are transmitted — would be allotted to operators at market prices.

This, however, may not result in higher mobile phone tariffs because of the highly competitive market conditions in India, said experts.

Telecom minister Kapil Sibal, who made the announcement, said all existing operators would be required to pay market prices for spectrum they hold beyond a specified limit.

Result: old operators like Bharti Airtel, Vodafone Essar and Idea will have to pay for spectrum above 6.2 MHz and new operators like Etisalat DB, Uninor, RCOM and Tata Teleservices will have to pay for more than 4.4 MHz of GSM spectrum.

“This will bring about a level playing field,” said Deepak Gulati, executive president, mobility business, Tata Teleservices.

The CAG has estimated that this policy change could earn the government an additional Rs 37,000 crore, but the precise figure will can be calculated only after the TRAI comes out with its recommendations on the issue. “We need to seriously consider the adoption of an auction process for allocation and pricing spectrum beyond 6.2 MHz while ensuring there is adequate competition in the auction process,” said Sibal on the mechanism for allotting additional spectrum. The new policy means the government has accepted most of the recommendations TRAI had submitted to the department of telecommunications last May. “In future, spectrum won’t be bundled with licences. Telecom operators will be granted ‘unified licences’, which will allow them to offer any of the multifarious telecom services,” the minister said.

Wealth in waves

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