Telecom Commission asks TRAI to clarify 2G pricing proposals

The Telecom Commission, the highest decision-making body under the telecommunications ministry, today asked the Telecom Regulatory Authority of India to further clarify its proposed norms for the resale of telecom licences and spectrum to be vacated under a Supreme Court order.

There has been considerable controversy over the norms proposed by the TRAI for bidding; including high base price, sale of small amounts of spectrum at a time, and allowing established players to bid for more spectrum.

Telecom secretary R Chandrashekhar said after a meeting of the Telecom Commission that the panel did not have a view yet on whether the proposed near 10-fold hike in the auction starting price from what operators had paid in 2008 sale was "too high".

"We wanted to understand the basis on which this reserve price has been arrived at ... what is the likely impact on tariff," Chandrashekhar said.

Earlier today, before the meeting, Chandrashekhar had said the government had set afoot preparations to launch the auction by mid-June, provided the empowered group of ministers on the issue, headed by finance minister Pranab Mukherjee, takes an early final call on pricing and other issues.

In a joint letter to the telecoms minister last week, the heads of five carriers including the local units of Vodafone and Telenor, and market leader Bharti Airtel, sought an 80 per cent cut in the proposed auction starting price.

They said the high cost of spectrum would push up tariffs by up to 30 per cent.