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Third time on, commission asks TRAI to assess pricing impact

india Updated: May 28, 2012 02:10 IST
Manoj Gairola
Manoj Gairola
Hindustan Times
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In order to build a case for lowering the proposed reserve price for spectrum auction, the Telecom Commission has asked the Telecom Regulatory Authority of India (TRAI) to analyse the impact of pricing on subscribers, operators and government revenues.

This will be third such calculation by the regulator in a month-and-a-half. The TRAI, under the chairmanship of JS Sarma, had twice submitted this calculation to the Department of Telecommunications (DoT). TRAI calculations show that the impact of the proposed reserve price on tariff would be only four paise per minute in the first year and reduce in subsequent years. The government would earn a minimum of Rs. 700,000 crore in about 10 years.

"From the analysis, it is apparent that the recent recommendations do not adversely impact the profitability of the wireless consumers or the entry of new operators. At the same time they provide for the discovery of true value of spectrum, realisation of revenue to the exchequer and ensure efficient utilisation of spectrum, a scarce natural resource," the TRAI said in a 34 page document titled Impact analysis of recommendations on auction of spectrum, submitted to the DoT earlier this month.

However, the Telecom Commission believes that the TRAI, under new chairman Rahul Khullar, would lower the price, said a source familiar with the development. In its recommendations on spectrum auction dated April 23, the TRAI had proposed a reserve price of Rs. 3,600 crore per MHz in the 1,800 MHz band.

On Saturday, the Telecom Commission left the decision on reserve price to the empowered group of ministers (EGoM) headed by the finance minister Pranab Mukherjee.

The commission would present an analysis of the impact of various reserve prices on consumers, operators and government revenue. It has asked the TRAI to do a similar analysis. Both reports would be presented to the EGoM.