New norms for 2G spectrum sale likely today
11 May 2010
The Telecom Regulatory Authority of India (TRAI) is finally unveiling its long awaited recommendations on overall spectrum management and review of license terms and conditions today, resolving some key issues like 2G spectrum roadmap, rules for mergers and acquisitions in the telecom sector, life of licence, and spectrum sale and sharing.
The Department of Telecommunications is awaiting the TRAI's views to finalise its long-term plans, reports CNBC-TV18.
The new norms for pricing of 2G spectrum are likely to be linked to 3G pricing, amid controversy about the 2G spectrum being underpriced to help certain Telecom operators. With revenue from the 3G spectrum auction already touching Rs54,000-crore against the government's expectations of Rs35,000 crore, the allegations of under-pricing of 2G radio waves have gained strength.
TRAI is likely to recommend an auction route for distribution of 2G spectrum beyond 6.2 Mhz and suggest scrapping of the current practice of giving radio waves on the basis of the number of subscribers. The telecom regulator may change the criteria from subscriber numbers to geographical coverage.
If the proposal is implemented, new operators like Uninor, Etisalat and Loop Telecom, which already have 4.4 Mhz of 2G spectrum, may have to buy spectrum beyond 6.2 Mhz. For allocation of spectrum between 4.4 and 6.2 Mhz, TRAI would take a decision based on the new criteria such as quality of service and stipulated network roll-out.
Existing players like Bharti Airtel, Vodafone Essar and Idea Cellular, which have spectrum beyond 6.2 Mhz, could then have to pay for the extra spectrum held from a prospective date, which would be the date of implementation of the new policy and not the date of holding the spectrum, thus lessening their financial burden.
The government has put allocation of 2G frequencies on hold since March 2009, until the DoT comes up with a pricing and disbursement formula. TRAI was asked to study the spectrum panel's report and issue recommendations on the new methodology to be adopted to award 2G airwaves.
