Sunil Jain’s “Stop picking winners” (February 1) contains gross factual errors and creates misleading impressions. Jain clubs the holding of CDMA and GSM, but both these technologies and their ecosystems are completely separate and the two spectrum cannot be combined for use. That is why the government charged the dual network operators twice — once for CDMA and the other time for GSM — and that is why the DoT levies separate spectrum charges for the two streams. Projecting the combined spectrum is, therefore, misleading the public.
While Tata Teleservices is still waiting to get even the initial GSM allocation in 39 districts and the Delhi circle, and both RCom and Tata are waiting for additional spectrum from 4.4 MHz to 6.2 MHz, the allocation of spectrum to incumbent GSM operators beyond the licence-mandated spectrum has helped these operators to the extent of Rs 30,000 crore in terms of savings in capex and opex.
Comparing the spectrum charges of incumbent GSM operators and the new operators (as Jain has done) is unfair since the new operators have lesser revenues. Take the example of Vodafone which has recently entered Assam, Bihar, Orissa, HP and MP etc — our members like RCom and Tata Teleservices pay two to three times more revenue per MHz than Vodafone. Going by Jain’s argument, this means the government must not give spectrum to Vodafone!
The policy of escalating spectrum charge for higher allocation of spectrum discourages substitution of physical infrastructure for spectrum. The Subodh Kumar report recommendations (that Jain endorses) on imposing uniform spectrum fee will create a non-level playing field between new and established operators. Jain ignores the point that levy of uniform spectrum fee will result in the government losing thousands of crores of rupees over the next couple of years.
The incumbent GSM operators are holding in excess of over 79 MHz of spectrum beyond the contracted 6.2 MHz and no entry fee has been paid for this. Jain has ignored this.
SC Khanna
Secretary General, Auspi
More From This Section
Sunil Jain replies:
Auspi is confusing entry fee and user-charges. It was a Trai recommendation that both spectrum be clubbed to levy the higher user-charge since, at the end of the day, spectrum is a scarce resource. The issue of the incumbent players getting free spectrum beyond 6.2 MHz is separate — this must be paid for and I have said so in various columns, but this article was about recurring spectrum charges.
As for Vodafone paying less than RCom/TataTele, as Auspi says, a lot depends on what subscribers pay. If you compare Bharti’s payments with RCom’s for circles like Assam, Bihar, HP, MP, Orissa, Kolkata etc, where RCom has been offering services for a longer period, it pays three-four times what RCom does per MHz! Which is why, instead of taking individual circles, it is better to compare the all-India combined picture, as I do, since both lots of firms have a mix of old and new subscribers. The Subodh Kumar recommendations of a flat spectrum fee do not envisage any loss in revenues to government.