Government tweaks 2G proposals, may abandon controversial spectrum price hike

12 Jun 2012

The empowered group of ministers (EGoM) reviewing the recommendations made by telecoms watchdogs the Department of Telecommunications (DoT) and the Telecom Regulatory Authority of India (TRAI) has altered the main objective of the upcoming auction of 2G frequencies from ‘revenue maximisation’ to maximising revenue ‘within the government’s set parameters’, adding that issues of affordability, accessibility and the improvement of telecom density must be taken into consideration, reports the Business Standard. The DoT and TRAI came under fire for proposing a significant jump in the base prices for spectrum, with opponents arguing that the increase would result in higher costs to end-users. A number of players including Uninor and Sistema Shyam TeleServices went further, threatening to quit the sector if the proposals were accepted. Whilst the controversial spectrum prices will not be finalised until after a further EGoM meeting on 20 June, the decision to consider factors such as affordability suggests that the government is looking to compromise with or appease the outraged operators. The EGoM has already made positive adjustments to the proposals, increasing the minimum spectrum to be allocated per circle from 5MHz, as recommended by the TRAI, to 10MHz.