TRAI lowers proposed CDMA spectrum price, but not GSM; Norwegian minister questions further investment in India

14 May 2012

The Telecoms Regulatory Authority of India (TRAI) has agreed a small concession in its proposals regarding the re-auction of spectrum and licences, in response to widespread industry protests and claims that costs to end users would more than double if the TRAI’s original proposals were brought into practice. As previously noted by CommsUpdate, the TRAI had suggested increasing the reserve price for frequencies by as much tenfold in some circles and bands. The TRAI has suggested cutting the base price of CDMA spectrum (i.e. the 800MHz range), but has refused to alter pricing plans for GSM. The revised proposal would see the TRAI set a reserve price of INR47 billion (USD863.1 million) per MHz of CDMA spectrum, rather than INR72.44 billion as previously recommended, though this reduction would only be applicable in certain circles. By comparison, the watchdog plans to set prices of INR36.22 billion per MHz of spectrum in the 1800MHz range, INR72.44 billion per MHz for pan-Indian frequencies in the 900MHz band and INR144.88 billion per MHz for the 4G-suitable frequencies in the 700MHz range. The TRAI guidelines are still subject to parliamentary approval before they can be put into place for the upcoming auction.

In related news, Norway’s trade and industry minister, Trond Giske has increased pressure on the Indian government, saying that the failure of Telenor’s investment in India would have ‘further political implications’. The Norwegian state holds a 53.97% stake in Telenor, which operates in India through joint venture Uninor, one of the companies to have its operating licences cancelled by the Indian Supreme Court in February this year. Whilst previous statements from the Norwegian government have been optimistic, expecting a reasonable solution to the 2G licensing crisis, this recent statement sets a different tone: ‘If this investment fails, it will be probably the biggest loss a Norwegian company has [made] in foreign investments ever. I think also it will be fair to say that it will influence the view of India as an investment country.’ Giske went on to say that the TRAI proposals have ‘created obstacles to our future engagement.’

India, Norway, Telecom Regulatory Authority of India (TRAI), Telenor Group, Telenor India