BJP criticises new reserve price of spectrum

They demanded that Prime Minister ask his office to reject the recommendations

Expressing dismay at the new reserve price of spectrum set by TRAI, BJP today said the steep reduction in costs will benefit a few operators and cause a loss to the exchequer and demanded that Prime Minister ask his office to reject the recommendations.

Senior BJP leader Yashwant Sinha has written a letter to Prime Minister Manmohan Singh, saying he is appalled and dismayed at the recommendations of TRAI. He has said that the proposed steep reduction in spectrum reserve price and Spectrum Usage Charges (SUC) will favour few operators at the cost of national exchequer.

Sinha has pointed out that TRAI has reduced the price of 1 MHz of spectrum pan-India by 37%, and the reduction is much steeper for key circles like Mumbai and Delhi at 50%.

"With these reserve prices and the amount of spectrum intended to be auctioned in the forthcoming auction, the potential loss to the government can be as high as Rs 35,000 Crore," Sinha said in his letter.

The former Finance Minister noted that these recommendations of TRAI contradict its own arguments. Last year, TRAI had defended and justified the reserve price of Rs 3,622 Crore for pan-India 1 MHz spectrum in 1800 MHz band. It had also insisted that impact of recommended reserve price on telecom tariff to subscribers will be negligible, Sinha added.

"I fail to understand why the same body now has junked its own recommendations within one year and has recommended such a steep reduction in the reserve price. This is not expected from a sector specialist regulator," Sinha said.

BJP did not buy TRAI's argument that steep reduction has been done for forthcoming auctions as the auctions held in November, 2012 and March, 2013 had been failures.

Sinha said auctions had failed due to collusion and cartelisation of the incumbent operators and not high prices.

"I urge your office to take immediate remedial measures and in order to realise the true economic value of spectrum and to uphold the interest of Indian citizens and the revenue objectives of the government, the recommendations of TRAI with respect to reserve price and SUC should be rejected forthwith," Sinha said.