TRAI tells MoC that 2G spectrum pricing proposals are ‘a work in progress’

19 May 2010

The Telecoms Regulatory Authority of India (TRAI) has informed the Ministry of Communications (MoC) that two recent regulatory proposals which sparked criticism from the country’s mobile operators are still a work in progress. According to the Economic Times, TRAI chairman JS Sarma called on the MoC to hold off making any final decision regarding the initial proposals, including the mooted plan to link the price for excess 2G spectrum to the ongoing 3G auction, with the executive noting too that further studies will be conducted to examine its initial suggestions.

Last week the TRAI announced a raft of new legislative proposals, including a call that those mobile network operators in possession of more than 6.2MHz of 2G spectrum face a one-off financial levy for the excess frequencies. Under the TRAI’s suggestions, for excess spectrum between 6.2MHz and 8MHz, cellcos would be required to pay a one-time fee equivalent to the final 3G auction price, while those operators holding excess spectrum between 8MHz and 10MHz would be charged 1.3 times the final 3G spectrum fee. Alongside a one-off charge, the TRAI also said that the amount of spectrum held by any one operator in a single circle should be capped at 8MHz in all circles bar Delhi and Mumbai, where the limit would be 10MHz. GSM players currently holding excess spectrum, such as Bharti Airtel and Vodafone Essar, have unsurprisingly blasted the plans, with the latter accusing the TRAI of seeking to overcharge established players while raising barriers to consolidation. Despite opposition to the plans from GSM players, the Association of Unified Telecom Service Providers of India (AUSPI), the representative industry body of the country’s CDMA operators, has claimed that the GSM-based cellcos are attempting to block the implementation of the new norms with a view to protecting their ‘vested interests’.

Mr Sarma also requested that the government await the TRAI’s final recommendations regarding the refarming of spectrum in both the 800MHz and 900MHz bands upon the expiration of an operator’s licence. As per its suggestions last week the regulator said that holders of spectrum in the 900MHz band should be issued substitute frequencies in the 800MHz band, while those utilising 800MHz spectrum should be assigned blocks in the 450MHz or 1900MHz bands when their respective licences are due for renewal.

In response to the escalating feud, the Finance Ministry has reportedly called on the empowered group of ministers on telecom (eGoM), which resolved the 3G auction issue, to consider the 2G spectrum pricing matter.