Though the telecom commission ? the highest apex policymaking body on the sector ? on Thursday formally wrote to the Telecom Regulatory Authority of India (Trai) seeking a number of clarifications from it on its recommendations submitted on April 23, there’s one suggestion which it is amenable to accepting.
The proposal pertains to allowing operators to mortgage spectrum to raise funds. As is known that the telecom commission had met on Monday and decided to refer a number of issues back to the Trai like the one relating to the calculation of the reserve price, impact on tariffs, refarming of the 900 Mhz spectrum and the quantum of spectrum to be auctioned. However, according to the minutes of the meeting of the commission, reviewed by FE, it has stated that the proposal to “mortgage spectrum may be accepted”.
‘The authority (Trai) recommends that DoT must take up with the ministry of finance and Reserve Bank of India to remove all the roadblocks in the framework for borrowing by the telecom sector against the spectrum assigned to them,? the regulator had said in the recommendations. The telecom industry’s debt exposure stands close to R275,000 crore.
However, dissatisfied with the regulator’s reserve price fixing mechanism, the commission has asked the Trai the rationale for fixing it and why the reserve price of 2,100 Mhz spectrum was fixed differently from the trend followed for spectrum between 2,300 Mhz and 700 Mhz. Offering a breather to the telecom operators, who have opposed the regulator’s recommendation on re-farming the 900 Mhz spectrum, the commission has asked the regulator as to why has it recommended the immediate re-farming of 900 Mhz, much before the renewal of the telecom licences of the operators who hold the spectrum in this band, while it has recommended that the spectrum in the 800 Mhz band may be re-farmed progressively.
The commission has also questioned the rationale for fixing the reserve price in the 900 and the 800 Mhz bands as one-and-a-half times the reserve price fixed by it for the 1,800 Mhz band.
According to the regulator’s recommendations, the reserve price for the 1,800 Mhz band works out to be R18,110 crore for a block of 5 Mhz of spectrum. Neither is the commission satisfied with the recommendation of auctioning just 5 Mhz spectrum and has, thus, asked the regulator to explain why it has proposed it.
