Under attack by the country?s top mobile operators like Bharti and Vodafone for coming out with ?arbitrary and perverse? recommendations on 2G spectrum pricing, Trai chairman JS Sarma came out strongly on Thursday rejecting the accusations, claiming the regulator?s suggestions were ?transparent, fair and aimed at promoting competition?. ?The recommendations are neither arbitrary nor perverse and are backed by logic and deep study,? Sarma told FE in an exclusive interview.
?I am in no way denying or undermining the contribution of the older players to the growth of telecom in India. My proposals also do not intend to punish anyone. If there?s such a feeling, it could be because of some communication gap. The simple principle by which I have gone ahead is that if any entity is holding excess spectrum, it must be paid for. It is unfortunate if anybody views it as punishment?.
Asked whether he would initiate a dialogue with the companies to allay their apprehensions, Sarma said he himself was not inviting anyone but was open to talks in case someone came forward. According to Sarma, the amount which companies like Bharti and Vodafone have to pay is small ? Rs 3,498 crore for Bharti and Rs 2,849 crore for Vodafone. ?Is the amount so much to affect the operations of the companies, or consumers or tariffs?? it?s the principle which is the issue.?
If the cut-off point for charging market rate for spectrum is made 4.4 Mhz, then all the operators ? old ones like Bharti, Vodafone, Idea et al ? and new ones like RComm (GSM), Uninor, Swan, Loop etc, would have to pay. In the case of 6.2 Mhz, the burden mainly falls on Bharti, Vodafone, Idea and state-owned BSNL and MTNL.
?So far the licence condition is not amended, it is more important for the government to honour contract rather than money,? Sarma said.
On the issue of not suggesting auctions for 2G, Sarma reiterated the point that beyond 6.2 Mhz there was not much spectrum and takers to go for auction, but if the government amended the licence to price spectrum beyond 4.4 Mhz, it was free to have auctions as there would be more spectrum and players. ?Even the Trai recommendations of 2007 made under a different chairman had not suggested auctions for 2G spectrum,? he pointed out.
Asked why not keep spectrum cheap if it has fuelled so much growth in telephony with record low tariffs, Sarma said, ?I acknowledge that viewpoint, but in the last two years there?s been considerable demand from all sections of society that the right price of the spectrum should be realised?.
Regarding merger and acquisition norms where Trai had said if two entities merged and held spectrum beyond 6.2 Mhz, they would have to pay market price for the excess amount, Sarma clarified that this was done to prevent companies from simply valuing spectrum. ?If they do so, the government should also get its due being the ultimate owner of spectrum.? The Trai recommendations encouraged a big player merging with a smaller one and vice-versa but certainly not two big entities merging, he claimed. ?The joint entity can have spectrum of only 14.4 Mhz and combined market share of 30%. A small company has 4.4 Mhz spectrum and a bigger one can have only till 10 Mhz,? he pointed out. As to why has he said there should be a minimum of six players in a circle post any merger, Sarma said studies showed competition was best at this number and suffered in cases where the number either went up or down.
