Telecom Regulatory Authority of India (Trai) has written a strongly-worded letter to the secretary, department of telecommunications (DoT), asking him to reject the demands of GSM telecom service providers.
The heads of India’s major GSM operators had criticised the regulator for his recommendations on auctioning of spectrum, and had demanded that the reserve price be lowered. They had also opposed refarming of spectrum.
In its recommendations submitted in April, Trai had proposed a reserve price of Rs 3,622 crore per MHz for the spectrum auction. This is about 10 times the price which old incumbent operators paid for spectrum.
The Trai letter to DoT strongly defends the reserve price, and says it would ensure that the government gets full value of the spectrum (Rs 7 lakh crore) without compromising the profitability of the industry, or adversely affecting tariff.
Trai has also defended its decision on refarming of spectrum, and said this is in keeping with the Supreme Court verdict on cancellation of 2G licences. Old incumbent telecom service providers were allotted spectrum in the 900 Mhz band, which is very efficient. The regulator has said the 900 Mhz band should be replaced with 1800 Mhz band, which is called spectrum refarming.
The authority has said the value of spectrum in 800 Mhz and 900 Mhz band is of the order of Rs 3 lakh crore.
This would also address the issue of a level playing field in spectrum availability, since new operators would get a shot at bidding for the 900 MHz band in the auction.
Trai has pointed out that since licences are due for renewal, this is the right time for refarming, and if it is missed, the government will not be able to do it for another 20 years.
On the issue of the number of slots for auction, Trai said it has no objections if more slots are offered, if sufficient spectrum is set aside for refarming.