India ?s telecom regulator Trai recently stirred a hornet?s nest with its recommendations on pricing 2G spectrum, inviting protests from telcos who branded them ?arbitrary and perverse.? The authority?s chairman JS Sarma has, however, defended them as ?transparent and fair?. Now, former Trai chairman Nripendra Misra, in an exclusive interview with FE?s Rishi Raj & Anandita Singh Mankotia, his first since he demitted office in March, 2009, says that the negative response by telecom companies does not augur well. Misra?s recommendations in 2007 were tweaked by telecom minister A Raja to grant licences in 2008. Excerpts:
What?s your overall assessment of the recent Trai recommendations on spectrum pricing and allocation?
Trai is mandated to foster the expansion of telecom services and protect the interest of consumers. Therefore, the recent recommendations have to be evaluated in terms of facilitating harmonious relationship amongst the various stakeholders. The ownership of recommendations?first by the telecom operators and finally by government?is crucial for peace in the telecom sector. The negative response by the telecom companies does not augur well for the sector, as some of the recommendations have been seen by them as changing the rules of the game midway. But the recommendations on unified licence and lower licence fee of 6% are welcome features.
Do you think rules of the game have been changed mid-way?
One of the basic tenets of a regulatory environment is to ensure constructive continuity and level playing-field conditions. The changes must not encourage the avoidable debate on ?winners? and ?losers?. Also, the allocation criterion for spectrum, if revised frequently, could seriously hurt some companies, thus inviting comments on grounds of discriminatory and non-level playing field conditions. It is well-known that a few firms have always missed the bus in the past for spectrum allocation, as the goal-post and the order of priority were redefined. Further, the guidelines should be friendly for mergers and acquisitions and some of the restrictions regarding subscriber base, spectrum ceiling and percentage share in overall revenue need to be deftly handled. Perhaps the concept of spectrum ceiling in a regime of auction needed to be liberal.
What according to you are the major areas which require consultations with telecom companies?
The objective for realising the value on spectrum?which is a national asset and also scarce?affordability to the consumer and future growth needed to be the guiding light and perhaps a dialogue with the telecom service providers will minimise the scope for acrimonious debate. The work done by the committee in the Department of Telecom on the subject of spectrum is a good basis for initiating the dialogue on Trai recommendations. The demand for payments for existing 2G excess spectrum, renewal of licence linked with 3G spectrum auction prices, and refarming of 900 MHz spectrum at the stage of renewal have serious financial and technological issues. Likewise, the suggested criterion of the rollout obligation for spectrum allocation, though well intended, should be evaluated with reference to experience already gained by TEC in DoT entrusted with the task of verifying prevailing rollout obligation of the licensee. The dialogue would effectively serve the purpose of cleaning up the telecom space leading to wider acceptability within the telecom fraternity.
