Despite the sweeping objections raised by the telecom ministry on the pricing of airwaves, it would seem the differences with the regulator on the issues are more procedural than substantive.
The objections are more in the nature of caveats for the inter-ministerial panel, the Telecom Commission, that is expected to take a view on both on Thursday — the almost two-thirds cut back in reserve prices for airwaves as made by the telecom regulator and the wholesale objections made to them by the telecom ministry.
A government source said the nine points on which the department has differed with Telecom Regulatory Authority of India (Trai) are meant mostly to flag the alternative views. The cut backs recommended by Trai should not be seen as a means to preserve the market share of the incumbent players in the sector, the source argued. Mohammad Chowdhury, sector leader (telecom) at PricewaterhouseCoopers said some “push back” was expected. “It has been a bold approach by the Trai, so I am not surprised there is a push back by those sections of the government looking at it purely as a fiscal issue”, he said. Chowdhury accepted that of the several issues on which the department of telecom panel has rejected the telecom regulator’s spectrum pricing package on Tuesday, the one on spectrum usage charges (SUC) was one of the most debatable.
It could also be the most contentious as it will impact all the telecom companies. While Trai has recommended a flat SUC charge for all operators at 3 per cent on total revenue irrespective of the spectrum band held, the department has argued that this is impossible because revenue arising out of auctioned and administratively allocated spectrum “cannot be segregated”. It has also argued that even if for instance, the SUC were to be reduced to be of 5 per cent the government will lose Rs 300 crore per year. SUC is the sum payable by companies to the government annually as a percentage of their adjusted gross revenue. This means the more spectrum held by a company and the higher the usage, the