Sector balks at TRAI recommendations

24 Apr 2012

The Telecoms Regulatory Authority of India has incensed representatives of the nation’s telecoms sector with its base price recommendations for spectrum concessions revoked by the Supreme Court earlier this year. According to the Economic Times, the TRAI has proposed reserve prices of INR36.22 billion (USD680.44 million) per MHz of spectrum in the 1800MHz range, INR72.44 billion per MHz for pan-Indian frequencies in the 800MHz and 900MHz bands and INR144.88 billion per MHz for the 4G-suitable frequencies in the 700MHz range. In addition, the TRAI proposed levying charges against players such as Bharti Airtel, Vodafone and Idea Cellular for holding excess spectrum. According to TeleGeography’s GlobalComms Database, Aircel paid INR64.99 billion for 2×5MHz of 3G spectrum in 2010; under the new proposals, 10MHz of frequencies in the 1800MHz band would cost an operator a minimum of INR362.2 billion, an almost six-fold increase on the 2010 price.

UK-backed cellco Vodafone Essar, although unaffected by the Supreme Court’s action in February and therefore not one of the operators required to re-purchase its spectrum rights, expressed its concern over the proposals: ‘Vodafone India believe several of these recommendations are retrograde and if accepted, will do irreparable harm to the industry.’ Uninor added its voice to the protest, indicating that it would be consumers that would suffer as a result: ‘These recommendations will create a severe negative impact on the entire industry. It is up to the political leadership of India to now ensure that the gains of the past few years of affordable phone calls for India’s people are not undone.’

The Cellular Operators Association of India (COAI) and the Association of Unified Telecom Service Providers of India (AUSPI), the industry bodies representing wireless providers on the subcontinent, described the recommendations as ‘arbitrary, regressive and inconsistent.’