GSM players to contest TRAI theory of minor tariff hike

May 7th, 2012 - 8:56 pm ICT by IANS  

New Delhi, May 7 (IANS) The heads of some telecom firms will meet Communications Minister Kapil Sibal Tuesday to contest the regulator’s contention that there would be only a minor increase in tariffs as a result of the steep hike in the reserve price of 2G spectrum.

The chief executive officers or regulatory heads of GSM players, including Bharti Airtel, Idea Cellular, Vodafone, Uninor and Aircel will also inform the government about the possible effect of re-farming on industry and the consumers.

“In the previous meeting the minister had asked us to explain to him why is there a huge difference between our and TRAI’s calculation on the affect on tariffs post implementation of its recommendations,” a senior executive with a top telecom firm told IANS.

The telecom players have warned the government that there might be a 100 percent tariff hike while TRAI has been arguing that the change might be just 2 to 3 paise post the acceptance of its recommendations.

The firms will also question TRAI’s calculation of the reserve price and will suggest alternatives such as basing the reserve price on the auction price for BWA (broadband wireless access) spectrum, which is much lower and also of high value.

The operators will also explain to Sibal the problems associated with TRAI’s recommendations on refarming the 900 MHz band.

The Supreme Court Feb 2 had ordered the cancellation of 122 telecom licences and asked the government to redistribute the licences through auction.

In its recommendations for the auction, TRAI has recommended, among other proposals, a reserve price of Rs.3,622 crore for 1 MHz pan-India spectrum, which is around 10 times higher than the price at which 2G licences were allocated in 2008 under former Telecom Minister A. Raja.

The proposals have drew strong criticisms from the industry and sector watchers alike, following which the Telecom Commission has sought more information and clarifications from the regulator on its recommendations.

The operators have sought a drastic reduction in the reserve price of spectrum, rejection of recommendation on re-farming, auction all spectrum available and do away with rollout obligations for auctioned spectrum from the government.

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