Modi needs to intervene in the DoT-Trai battle
With the Department of Telecommunications (DoT) continuing to waffle around the larger issue of providing more spectrum to telcos, and the deleterious consequences of this, it is obvious matters need to be escalated, if need be to the level of the Prime Minister himself. Right now, what you’re getting is just a pointless to and fro between the DoT and the Telecom Regulatory Authority of India (Trai) with no clarity on which way matters are going. The crux of the problem is to get more spectrum for the auctions, and Trai had made various recommendations to achieve this. So, in the case of BSNL which has way too much spectrum in all but 2 circles—given what is legally due to it—Trai recommended taking back 1.2 MHz in the 900 MHz frequency band. The DoT’s response has been that it “has no jurisdiction to take back the spectrum from BSNL”—not surprisingly, then, that Trai has countered by saying BSNL was given this spectrum without any auction; nor did the government have any hesitation in forcing it to take 3G and BWA spectrum, or taking back the latter when BSNL wanted. Similarly, when Trai said the defence could not just squat on 1800 MHz spectrum, DoT replied “it is not possible to fix a timeframe for migration of Defence from commercial band to Defence band”. But Trai is right, the Defence cannot be using commercial spectrum while, at the same time, keeping Defence spectrum reserved for itself in perpetuity. Nor has DoT given any satisfactory answer to why a swap is not being done with Defence to free up 3 carriers of 5 MHz each in the 2100 MHz frequency band, vital for spectrum-starved telcos.
More important, as Trai has said in its reply to the DoT, it is high time someone took a serious look at how the sector is developing—between A Raja giving spectrum virtually free to cronies in 2008 to the high spectrum bids later, the sector is in serious trouble. Given the large economies of scale, for instance, thought needs to be paid to having large infrastructure providers with 30-40 MHz of spectrum and leasing this out to different telcos; the government can look at providing larger amounts of spectrum free with onerous rollout obligations … while Trai has touched upon the need to look for different solutions, what is amazing is that the government has, till date, not come out with norms on spectrum sharing and trading. If these norms were in place, and telcos like MTNL and BSNL have so much extra spectrum, the private telcos could take a more reasoned approach to auctions instead of simply bidding for their lives. While the idea should be to look for solutions that work for both the industry as well as subscribers, the DoT’s approach seems to be one of maximising revenues—by not augmenting spectrum availability and having separate auctions for 800/900/1800 MHz and 2100 MHz, the idea appears to try and get the telcos to bid as much as they can, never mind what it does to the health of the industry.