The finance ministy has asked the telecom ministry to take a quick decision on the recommendations of telecom regulator Telecom Regulatory Authority of India(Trai) with regard to allocation and pricing of 2G spectrum.
Trai had submitted its report — Spectrum Management and Licensing Framework — more than a month ago.
It had recommended capping the quantity of spectrum in each circle to 8 MHz, other than in Delhi and Mumbai, and price the extra spectrum beyond 6.2 MHz held by operators at a rate equivalent to 3G, for which the price was discovered recently through auction.
Bidding for pan-India 3G licence touched Rs 16,759 crore.
“In this context, we reiterate our earlier advice and recommend that the entire issue relating to allocation and pricing of 2G spectrum (GSM/CDMA) may be placed before the Telecom Commission at the earliest opportunity so as to evolve a coordinated view in the matter,” Finance Secretary Ashok Chawla said in a letter Telecom Secretary P J Thomas.
The Department of Telecommunications had constituted an internal committee to look into the recommendations of Trai and place it before the Telecom Commission.
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The GSM operators including Bharti Airtel, Vodafone and Idea Cellular had opposed the Trai recommendations, telling the government there were “retrograde” and “absurd”.
They are critical of capping the spectrum at 8 MHz in all circles except Delhi and Mumbai, where the limit is 10 MHz, as they think it would restrict future growth.
According to them, the Trai recommendations, including those on pricing of spectrum beyond 6.2 MHz, are bad for incumbent mobile operators, as paying higher fees for existing as well as future 2G spectrum will be a big financial burden on telcos, especially Bharti and Vodafone, as their profits have already come under pressure due to an intense rate war.
Trai had also come under attack for recommending refarming of spectrum according to which players holding spectrum in the 900 MHz band would be asked to return excess spectrum as and when their licence comes up for renewal.
The finance ministry would take a final call on the pricing of 2G spectrum, for which Trai has decided to hold separate discussions with telecom operators and is expected to give its views by the end of next month.