With the spectrum auctions set to get underway from March 4, the first such exercise under the new NDA government, Minister for Communications and IT Ravi Shankar Prasad is categorical in his assertion that adequate spectrum is being made available in the first round and that the reserve price of the band where 3G and data communications can operate has been pegged at reasonable levels. In an interaction with Anil Sasi and P Vaidyanathan Iyer, Prasad talks about his biggest task being that of restoring confidence in the scam-hit sector. Edited excerpts:
While the government is being credited for ending years of dithering on the release of spectrum with Defence, which has agreed to release 15 MHz of 3G spectrum for use by telcos, there is criticism that the government is not putting this up for auction now. How do you respond to that?
From the very first day that I have been minister for communications and IT, my focus has been on addressing some of the legacy issues in communications. I know that spectrum is important … Now I am of the considered view that adequate spectrum is available.
And I have myself walked the extra mile to ensure that. This whole issue of defence that has been pending for the last eight years has been sorted out. 5 mega Hertz (MHz) is freely available and that is being put up for auction this time round. As regards, 15 MHz, it is subject to swapping and amalgamation. But it’s not available yet. I know it will eventually become available … but to offer it for the upcoming spectrum auction, I must be having it clearly in the hand of the department (Department of Telecommunications). So therefore, the department will not be acting fairly if without actual the release of the same (by Defence) … I stand committed that whenever the 15 MHz becomes neatly and clearly available, it will be put up for auction. I will tell my friends in the telecom sector that this is not the last auction of the Narendra Modi-led government. So they will have to wait.
The high reserve prices have come in for criticism, especially the base price for the band where 3G and data communications can operate, which is 35 per cent higher than what telecom regulator Trai recommended. How do you respond to the criticism that high spectrum charges are a pass-through for telcos, which will translate into higher tariffs at the consumer end?
On pricing, there is a mechanism … it goes to Trai, comes to Telecom Commission, the Commission seeks a review, it goes back to Trai and then we take a call in the cabinet. But the real criticism is of 2100 MHz. Let me explain. The last auction was done in the year 2010. Thereafter in subsequent auctions, the 2100 MHz was not offered. You will appreciate the fact that in 2010, the price was fixed at Rs 700 crore per MHz reserve price. In the auctions, it fetched an auction amount of Rs 3,500 crore per MHz. Therefore, if a government that is publicly accountable chooses to go below the rate of 2010, it will have some explaining to do. And we have also not raised it unreasonably. The (2010) auction fetched eight times the estimated reserve price, we have now pegged it at eleven times. I know that Trai suggested a price, but how can we, as an accountable government dip below the price at which a good auction was conducted (in the 2100MHz band) six years ago?
The spectrum sharing and trading guidelines, which was expected to come out early this year, is now reportedly delayed? Don’t you think the lack of clarity on rules for spectrum sharing could have a bearing on spectrum availability and the larger objective of rationalising costs?
The reason for the delay is the legal process. It (the guidelines) has to go to Trai, it has to come to Telecom Commission, and the cabinet then has to take a final call. I can’t bypass the legal process. Then the option before us was to delay the whole auction process … So, we decided to proceed with the auction this time.
What is the progress so far on the Digital India plan?
There are three components essentially for this programme, all of which seeks to connect Indian digitally. The NOFN (national optic fibre network) is one part of Digital India, which will connect 150,000 Panchayats across the country. We are also formulating a policy for setting up call centres in small towns and rural areas. BPOs have largely been restricted to seven-eight metro cities. We want BPOs to be set up in smaller towns, such as Gorakhpur, Jalandhar, Idukki, Aurangabad and other such places. If BPOs are opened in mufassil towns, it’s a statement of intent. The government will create a policy for enabling of such call centres with due hand-holding and incentives to private players and the policy will be finalised soon.