The issue of pricing 2G spectrum and a new liberal and merger acquisitions for the telecom sector will be referred to the Cabinet for approval once the telecom commission clears them. Post the approval from the Cabinet the norms would be announced independently from the national telecom policy, which is expected next month. The matter will be sent to the Cabinet after telecom minister Kapil Sibal ratifies the decisions of the telecom commission.
Since the telecom commission has the finance secretary, secretary planning commission and secretary department of industrial policy and promotion as members, the decisions will construe to be of inter-ministerial nature.
Sources said that 2G spectrum pricing, M&A norms and other recommendations of the Telecom Regulatory Authority of India (Trai) are expected to be referred to the Cabinet within this month and a final announcement expected. This means that the most contentious issue of 2G spectrum pricing, which the industry is keenly awaiting have been divorced from the NTP and will be addressed and announced separately.
The telecom commission discussed most of these matters last week on Friday but a final decision has still not been taken. ?We have discussed almost all the issues but we need to have one more meeting to take a final decision on the matters,? sources said.
Meanwhile, operators like Bharti Airtel, Vodafone and Idea Cellular have upped the ante against the Trai?s recommendation that they be charged a one-time fee for holding spectrum beyond 6.2 mhz. In a letter to the department of telecommunications (DoT) secretary R Chandrashekhar, who?s also the chairman of the telecom commission, CEOs of Bharti, Vodafone and Idea have slammed the regulator?s pricing mechanism, calling it flawed and biased. ?We are amazed that although the Trai had clearly concluded in 2007 that no one-time charge up to 10 mhz is legally sustainable, the same authority is now recommending a charge beyond 6.2 mhz?, the three companies have complained.
The three operators have openly contested the legality of the government?s move in case it does levy a one-time fee beyond 6.2 mhz. ?It is inexplicable that DoT appears to be continuing to consider these Trai recommendations which are contradictory to its own prescribed licence terms, its positions on affidavit in TDSAT, the statements of the ministry in the Parliament, and judicial pronouncements over the last decade, ? they have stated.
The operators have instead suggested that if any fee is to be levied for spectrum beyong 6.2 Mhz then it should be applicable from the date the decision is taken and be applicable to the one who are granted spectrum after that date.
According to the Trai?s pricing formula operators like Bharti, Idea and Vodafone would have to shell out 136% of the 3G spectrum price as a one-time fee for spectrum held beyond 6.2 Mhz. The three operators have said that the Trai?s mechanism is doubtful as even the DoT had questioned the formula for calculating it. They have urged the government to conduct auctions in order to arrive at the market price for 2G spectrum.