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TRAI wants free for all

TRAI recommends wide-ranging measures on a technology-neutral platform through efficient spectrum allocation, reports Gaurav Choudhury.

business Updated: Aug 29, 2007 22:03 IST
Gaurav Choudhury
Gaurav Choudhury
Hindustan Times

The Telecom Regulatory Authority of India (TRAI) on Wednesday recommended wide-ranging measures aimed to usher in more competition on a technology-neutral platform through efficient spectrum allocation.

TRAI said that there should be no cap on the number of service providers in any circle and suggested the constitution of multi-disciplinary panel consisting of representatives from industry, government and the scientific community for allocation of spectrum.

The regulator said the existing licensees should be permitted to provide services through either of the technologies CDMA (code division multiple access) and GSM (global system of mobile communications), subject to certain conditions.

On the issue of service providers using a combination of CDMA and GSM technology, it felt that spectrum, excluding those in the 800, 900 and 1800 MHz bands, should be auctioned in the future to ensure efficient utilisation of the scarce resource.

TRAI’s recommendations are subject to the government’s approval.

In the interim, however, TRAI has suggested a revised subscriber-based spectrum allocation criterion raising the threshold subscriber level for all bands. Any operator, wishing to get additional spectrum beyond the 800,900 and 1800 MHz bands would have to pay a one-time spectrum charge of Rs 80 crore (for Mumbai, Delhi and Category A circles), Rs 40 crore (Chennai, Kolkata and Category B) and Rs 15 crore (Category C).

Currently, a company pays one per cent of its revenue to the government for additional spectrum, being allocated on the basis of each company’s subscription levels.

For Mumbai, Delhi and Category A service areas, the regulator has suggested a one-time spectrum acquisition fee of Rs 16 crore for one MHz of additional spectrum.

The telecom sector regulator has also removed the existing spectrum cap of 15 MHz for an operator in a circle. TRAI has marginally increased the spectrum charges of frequencies up to 10 MHz to 5 per cent from the existing 4 per cent.

It has proposed that acquisition of 10 per cent stake in a telecom firm by another company operating in the same circle should be allowed through the automatic route. “Anything beyond that and up to 20 per cent of the equity holdings of the target company shall be approved on a case-by-case basis,” TRAI said.

It recommended that no mergers and acquisitions activity should be allowed if the number of service providers reduces to under four in the relevant service area, and recommended the lowering of universal service obligation fund to provide rural connectivity from the existing five per cent to three per cent of the adjusted gross revenue.

First Published: Aug 29, 2007 20:46 IST