An internal panel of the department of telecommunications (DoT) has rejected the Telecom Regulatory Authority of India’s recommendation to liberalise spectrum, saying that it would be inconsistent with the current rules and regulations, especially since different licence holders have paid different entry fee. And since there was no concept of liberalisation when 3G and BWA spectrum was auctioned, the matter requires to be examined afresh.
By liberalisation of spectrum, the Trai had suggested that with the forthcoming auctions, usage of spectrum should be technology agnostic, meaning that 2G spectrum can be used for 4G services and vice versa.
The decision is significant as the regulator’s recommendations on auction of 2G spectrum are due to come for deliberations at the telecom commission meeting on May 24 and these recommendations shall be reviewed alongside the opinion of this panel of DoT.
The DoT committee has concurred with most of the recommendations made by the convener of the inter-ministerial committee JS Deepak, a joint secretary in the commerce ministry who in a letter dated April 30, had written to the the telecom commission stating that spectrum liberalisation would bring about inequity at this point of time since 3G and BWA spectrum auctions had mandated otherwise and had faulted the reserve price of R18,100 crore since it was inadequately indexed and the actual reserve price would turn out to be higher close to R20,000 crore.
The Trai had made a string of recommendations on the auctioning of 2G spectrum in the 1,800 mhz band, 700 mhz band, 800 mhz and the 900 mhz band to the government on April 23. This was in response to the Supreme court’s order canceling 122 2G licences and asking the government to auction the spectrum afresh.
While recommending a reserve price of R18,110 crore for a pan-India slot of 5 mhz spectrum the regulator had also said, ?All spectrum to be auctioned through auction process should be liberalised. In other words spectrum in any band can be issued for deploying any services in any technology?.
The DoT committee, however has contested this recommendation saying that there were differences in the terms and conditions and entry fee of CMTS/UAS and ISP category A licences, whether migration may lead to equity and financial issues. It is to mention that entry fee in respect of CMTS/UAS was 1,658 crore and that for ISP category A was R30 lakh. Also there was no concept of liberalisation when 3G/BWA spectrum was auctioned and there was substantial difference in the block size and auction price of 3G and BWA spectrum.
The committee has also revised the reserve price of a block of 2G spectrum from R3,622 crore to R4,245 crore since the 3G spectrum auction price, the basis for the reserve price of the 2G spectrum auction, took place in 2010, the present value needs to be indexed for a period of two years as against one year used by the regulator.