Spectrum price should be at par with 3G: TRAI

Telecom Regulatory Authority of India (TRAI) on Tuesday recommended

that 3G spectrum price should be the benchmark for the pricing of access spectrum allocation to the telecom operators in near future.

TRAI has ruled out auction of access spectrum.

If accepted by the DoT in current form, the new guidelines would create a revenue opportunity worth Rs 30,000 crore — Rs 35,000 crore for the government, JS Sarma, chairman, TRAI, said.

TRAI recommended that

3G spectrum price should be at par with 1800 Mhz band of spectrum while 900 Mhz band should be valued at 1.5 times that of spectrum in 1800Mhz band, as it is more useful for the service

providers. Both the bands would become very expensive for telecom

operators, as the prices of 3G spectrum have already touched sky high,

in case the government accepts the recommendation. The regulator has

sought more time on the pricing of 2100 Mhz band to 1800 Mhz band of

spectrum.

The authority has opined that the subscriber liked criterion be done away with the assignment of spectrum of the telecom operator, as the number of connection doesn't truly reflect the number of subscribers with the advent of several new packages and DUAL sim phones.

TRAI in its recommendation proposed that spectrum sharing be allowed,between two service providers as long as each of them does not hold more then 4.4/2.5Mhz of spectrum (GSM/CDMA). However, leasing of spectrum is not permitted.

The telecom regulator also recommended that merger and acquisition be allowed subject to their being a minimum of six service providers, post merger. The market share of the resultant entity should not be more than 30% of the total subscriber base or AGR in license service area.

The recommendations also emphasized the need of uniform license fee

across all the telecom licenses and services providers. It recommended

charging license fee from the infrastructure service providers as well

as the Internet service providers in a graded manner beginning with 4%

in the year 2010-11, to reach 6% in the year 2012-13. As of now an ISP

hold a license but pay a fee of only Re 1, expect in those offering

Internet telephony. Telecom tower companies are registered under IP-1

(Infrastructure providers-I) and have a turnover of around Rs 20,000

crore and expected to see a growth of 15% in the next few years.

akhileshs@cybermedia.co.in