The chairman of the Telecom Regulatory Authority of India (Trai), J.S. Sarma, spoke in an interview about the regulator’s recommendations on radio spectrum management. Edited excerpts:
Spectrum issues: Trai chairman J.S. Sarma. Dueshwar Singh / Hindustan Times
You have now set a cutoff level of 6.2 MHz for (2G) spectrum for all existing operators. Beyond that, there will be an additional charge that they will have to pay, which has been linked to the price that is being discovered through the third generation (3G) auction. The per MHz price as of Monday was Rs122 crore. Clearly, there is going to be a huge impact on existing operators. What is your rationale and how will this impact the government’s revenues?
Let me dispel the impression that we have set a limit of 6.2 MHz that is already existing in the licences that have been issued from time to time. From 2001 onwards, the 6.2 MHz limit exists. We have clearly brought out that that is the contracted spectrum. So far as government revenues are concerned, we have now said because so far the spectrum is being given as per the licence without charging them any additional entry fee. We have stated that beyond 6.2 MHz, whether the person holds the spectrum currently or an entity gets this spectrum assigned subsequently, beyond 6.2 MHz, the price must be paid. Our estimation is that 156 MHz of spectrum is held actually beyond the limit of 6.2 MHz.
156MHz across India?
156 MHz across India. Going by the current prices, as you just now pointed out, the price is still being discovered but roughly it might mean about Rs30,000-35,000 crore.
If these operators who got additional spectrum because of government policy in the past are now being asked to pay up, and they are also bidding for 3G spectrum, suddenly they might see some sort of financial burden. If they protest, what would you say to them?
I think the fact is that they hold the spectrum, the fact is that the spectrum is beyond 6.2 MHz, the fact is that there is a price, so really there is nothing much to say.
You have also proposed a new kind of licence without spectrum. What is the purpose of this?
You are right. Most people may not really want a licence without spectrum, but the fact is some services can always be offered; Internet service can be offered, any other service can be offered. I mean, somebody may want to do wireline tomorrow. After all, we are really looking into the future, we really don’t know what the shape of things will be.
So, we really do not want to bind anybody to the unified access services. Today, the only form of access licence that is available is the UAS licence and that is at Rs1,658 crore or whatever is the current price. So, now obviously, people will not be wanting to pay because there is no spectrum available.
So, we would like to provide an opportunity for people to take up any other activity, any other telecom service activity in case they would like to, and that is why that licence which will be available... that will not be linked with spectrum.
What you are advocating is doing away with the practice of subscriber-linked criteria. Please explain.
First of all, what is the idea behind the entire spectrum management? This is a scarce resource and must be utilized most efficiently and efficient use for the common good. Frankly, the vast majority of our population lives in rural areas. The current coverage of rural areas is small.
What we would like to do is to ensure that the operators utilize the spectrum most efficiently. If they are asking for additional spectrum, they must demonstrate that they have actually covered the rural habitations as much as they have covered the cities because so far, the rollout obligations have been urban centric.