?We were trying to preserve certain interests of the govt?

Telecom Regulatory Authority of India (Trai) chairman Nripendra Misra demits office on March 22 after a three-year stint, but with a big regret. Under his watch, he rues, the telecom sector did not see more consolidation. There should have been more mergers & acquisitions, Misra says. What explains the absence of M&As? In an exclusive interview with FE, Misra attributed this to ?government interests?.

?The failure was because most of the time we were trying to preserve certain interests of the government, be it related to spectrum pricing or government revenue. This brought certain rigidity to our recommendations.?

?On the conceptual plane one can ask, `what is the vision I should have had for the sector?? My answer would be perhaps consolidation of the sector. Let me be very specific, whether my recommendations are incentivising or disincentivising consolidation was the litmus test. The recent recommendation on the minimum lock-in period of promoters? equity was made with the background that spectrum pricing in our country does not truly reflect the cost of spectrum. These measures were basically to increase the revenue of the government?, Misra said.

The recommendation of a three-year lock-in on promoters? equity of new telecom licensees, referred to Trai by DoT, is seen as a face-saver for communications & IT minister A Raja, who granted telecom licences to a host of companies last year at ?throwaway prices.? With the lock-in clause, Raja tried to defend his position after two licensees sold a part of their equity to foreign firms at high valuations, leading to charges of causing huge losses to the exchequer.

Misra?s take on that is that freedom comes with constraints.

He regrets that many of his progressive suggestions were not acted upon. ?We had thought of bringing the telecom sector to international standards in terms of technology. The fact that 3G, Internet telephony, mobile virtual network operators and broadband wireless access could not be implemented despite our recommendations is certainly unfortunate,? he said.

Misra also listed four other constraints on the telecom regulator. Trai, he said, has no financial autonomy. ?We can?t fix pay structures. Apart from the budgetary grant that we get, there should also be a cess on telecom companies, which should come directly to us,? he said.

Second, he said, the government needs to clarify the powers of Trai on interconnection. This is a grey area, because the judgement of the telecom tribunal is that interconnection is a commercial arrangement between operators, and Trai has no role there. Trai is contesting this in the Supreme Court. Interconnection means a regime by which calls made from one network terminate on another and is the backbone of the entire network.

The third area that requires change is that Trai should be given powers to levy penalty on operators who disobey its directions. ?At present, we can?t levy a penalty of a single rupee. If any direction is disobeyed (by the operators) all we can do is chargesheet the operator in a civil court.?

The fourth area is that there should be a provision for reconciliation in a dispute. Right now all disputes go straightaway the telecom tribunal.