New Delhi: The Telecom Commission, top telecom policy-making body of the government, has failed to arrive at a consensus on the Telecom Regulatory Authority of India’s (Trai’s) recommendations on spectrum auction.
“We have asked them (Trai) for clarification on some issues. Due to the urgency of the matter, we have asked them to reply by this week itself,” said a senior department of telecommunications (DoT) official, who attended a Telecom Commission meeting on Monday. The official didn’t want to be named.
The commission has sought more clarity on the issues that have been dealt with by the regulator. These include the number of slots of spectrum to be auctioned, the reserve price for the spectrum on sale, the network roll-out obligations, eligibility criteria for the participants and provisions for the allocation of spectrum in a different frequency.
A nine-member empowered group of ministers (eGoM) that is looking into the spectrum auction is also expected to discuss the telecom regulator’s recommendations on 1 May.
“The eGoM will be apprised of the situation first. This will be done by officials of the DoT and will include all relevant information including the Supreme Court verdict and the NTP (National Telecom Policy 2012) apart from all the recommendations received so far from Trai,” said another senior DoT official, who also declined to be named. “The eGoM is also expected to take a call on the finalization of an auctioneer who will carry out the auction.”
Trai has been asked to send its clarifications within a week and the Telecom Commission will consider the replies in a meeting on 14 May.
Meanwhile, Vodafone India Ltd, the country’s second largest telecom service provider by revenue, has written to communications minister Kapil Sibal saying that the change in telecom spectrum policies, as suggested by Trai, would lead to a Rs 10,000 crore additional cost burden on the company, which will lead to a significant increase in tariffs.
“Vodafone estimates that apart from the write-off of existing investments, it will cost around Rs 10,000 crore to replace its 900MHz (megahertz) with an 1,800MHz network,” T.V. Ramachandran, resident director for regulatory affairs and government relations at Vodafone India, said in the letter to Sibal reviewed by Mint.
In its recommendations on the spectrum auction, submitted to DoT on 26 April, Trai had suggested that all spectrum be auctioned over the next three years.
The regulator also suggested that operators with spectrum in the 900Mhz band that is cheaper to operate be asked to surrender it and be given airwaves in the 1,800Mhz band as replacement.
Ramachandran said the increased expenditure will not only be on account of additional towers to ensure a certain standard of connectivity, but also on increased usage of diesel and other resources needed to operate the network.
Vodafone’s letter also said the original licence agreement used the word “extension”, implying that there would be no change in the fundamental operating parameters. An arbitrary change in the fundamental structure of the licence agreement, based on which the telecom companies made huge investments, would give operators fewer incentives to continue to invest in the sector, the letter said.
“Our licences are already technology-neutral and the government has allowed us to deploy any technology in our allocated spectrum. Thus, the potential change in use of spectrum cannot be a trigger (excuse) for “refarming” because technology-neutrality is already built into the policy and licensing framework,” the letter said.