Telecom watchdog to hold talks on pricing of 2G spectrum

May 20th, 2010 - 6:45 pm ICT by IANS  

New Delhi, May 20 (IANS) India’s telecom watchdog Thursday said it will hold additional talks with private operators on the proposal to levy licence fee on airwaves beyond 6.2 megahertz held by them for second generation (2G) services and hoped to resolve the issue by July 15.
“I have asked the operators to give their views on linking 3G spectrum price to 2G by June 15. We plan to finalise the process by July 15,” J.S. Sarma, chairman, Telecom Regulatory Authority of India (TRAI), told reporters on the sidelines of an awards function.

“We are consulting others as well,” he said, adding that he hoped the government, too, would study the proposals sent by the regulatory authority. “I expect the government to take some time before finalising the proposals.”

The watchdog has May 11 proposed a one-time levy on unused radio spectrum with service providers based on the price derived from the auction for 3G frequency that could bring over $7.5 billion of additional revenue to the government.

TRAI said telecom operators like Bharti and Vodafone, which hold radio spectrum beyond 6.2 mega hertz be charged a one-time fee based on the price derived from the ongoing auction for frequency for 3G services.

The regulator — whose recommendations are being studied by the government — has also called for a spectrum cap per operator of 10 mega hertz for Delhi and Mumbai and 8 mega hertz for other circles to be imposed on operators.

“As per our estimates, there is 156 mega hertz of spectrum beyond 6.2 mega hertz across India. So, going by the price being offered for the 3G spectrum, it could amount to a revenue of Rs.30,000-Rs.35,000 crore,” Sarma has said.

“What we have said is that beyond 6.2 mega hertz, the price must be paid.”

The move comes against the backdrop of the government being assured $15 billion worth of revenues from the ongoing auction of 3G spectrum. The opposition parties had also charged that the spectrum for 2G telephony was handed over rather cheap.

The GSM operators, led by Cellular Operators Association of India, asked the government to dump the watchdog’s proposals. Leading players like Bharti Airtel and Vodafone called it “shocking, perverse and opaque”.

But the CDMA operators’ lobby Association of Unified Telecom Service Providers said the recommendations were progressive and encourage rural telephony, with incumbent operators having to pay up for existing spectrum and return the excess airwaves.

At the end of March, India had 584.32 million wireless telecom subscribers, serviced by 15 companies, including two public sector undertakings. As many as 20.31 million new additions accrued in March alone.

The dominant players are Bharti Airtel with a 21.84 percent share, followed by Reliance Communications with 17.53 percent, Vodafone with 17.26 percent, Bharat Sanchar Nigam Ltd with 11.89 percent, Tata Teleservices with 11.29 percent and Idea Mobile with 10.92 percent.

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