The high-profile meeting of the telecom commission on Friday to decide on 2G spectrum pricing and merger and acquisition norms for the sector remained inconclusive.
This is the second instance in the last one week when the commission has been unable to come to a decision on the two issues, along with a host of other measures, that are vital in formulating the national telecom policy, due to be announced in January. The last meeting took place on November 28. The commission will once again meet on December 9, when it expects to come to a decision.
?We will have another meeting. We have now covered about 60% of Trai?s recommendations and we would have another meeting on the December 9 and our effort would be to complete it… We have covered most of the issues related to spectrum requirement and availability and the issues relating to licensing,? department of telecommunications secretary R Chandrasekhar, who is also the chairman of the telecom commission, told FE.
Chandrasekhar added: ?As I mentioned last time, we had discussed the issues relating to pricing and merger and acquisition… So whatever are the remaining issues as well as the residual issues on these topics will be taken up on December 9. We will only freeze all these discussions when we complete the whole deliberations.?
Friday’s meeting came against the backdrop of a rare show of unanimity with veterans like Sunil Mittal, Anil Ambani, Kumar Mangalam Birla, Vodafone’s Vittorio Colao and Tata Sons’ Ishaat Hussain writing a joint letter to telecom minister Kapil Sibal, urging that auction is the best route for 2G spectrum. They have also put up a joint front on 3G intra-circle roaming and an effective and realistic merger and acquisition policy.
By favouring auctioning of 2G spectrum, the industry as a whole has junked the proposal by regulator Trai, which was not in favour of auctions but had put forward an administered pricing through a complicated formula which suggested that spectrum up to 6.2 MHz should be priced at 53% of 3G prices and beyond it at 136% of it. Accordingly, per MHz spectrum price till 6.2 MHz was coming to Rs 1,769.75 crore and beyond it Rs 4,571.87 crore.
Analysts maintain that the unity among the operators has come about apparently because of the realisation that in the new reality, auction prices would not be as high as 3G and certainly lower than the ones arrived at by Trai. The industry has come a long way since the summer of 2010, when the 3G auctions took place. Saddled with high debt and lower revenues and slower revenue growth, nobody seems to have the stomach for a fight anymore. Naturally, all parties stand to benefit.
While players like Bharti Airtel and Vodafone need to pay the government a one-time charge beyond 6.2 MHz, operators like Reliance Communications and Tatas would have to pay for spectrum beyond the start-up 4.4 MHz they have for their GSM services.