'Allowing new firms to bid for 3G will cause huge problems'

Q&A/ Nripendra Misra

The TRAI's recommendations on limiting the auction of 3G spectrum to only the existing operators has been criticised by the telecom ministry, and the one on allotting 2G spectrum at bargain basement prices has been opposed by the finance ministry. Undeterred, TRAI has come up with several more consultation papers, including some on the broadcasting side. TRAI Chairman Nripendra Misra spoke to Sunil Jain, Surajeet Das Gupta and Shuchi Bansal. Excerpts:

The Department of Telecom (DoT) is opposing your 3G recommendations and the finance ministry says you've under-priced the 2G one ...

I don't think the newspapers are fully reflecting what the DoT is saying. The DoT is looking at two things "" what they had referred to us (can non-licensees be allowed?) and what we reiterated (that they cannot). Don't forget that the DoT had suggested prior experience for allowing operators to bid for 3G. If we'd gone along with this, none of the new licensees can bid for 3G!

You've got 12-13 2G licensees bidding for three 3G slots (the fourth is reserved for BSNL/MTNL). What's wrong with allowing one new entrant? Nowhere in the world are new entrants kept out.

This will cause big problems. Let's say a non-licensee wins the 3G bid. How will you bring him in? Under the UASL licence. But this also entitles him to 4.4 MHz of 2G spectrum. We've done the exercise and, even under the most rosy projections of the maximum spectrum that can be made available, all the existing licensees may not be able to get even 6.2MHz of 2G spectrum. In such a situation, why do you want to create one more claimant for this 2G spectrum? If the new 3G operator doesn't get 2G spectrum, he can't rollout a 3G network either. And you can't give him the 2G spectrum till you give it to all the people who are in line already waiting for spectrum (the people who applied after Sept 25 and till Oct 1) before him!  

But that's a problem you created. You said there should be no cap, and that's how the new 2G players came in "" till then there were just five-six players. And now you're saying there won't be enough spectrum for them.

Umm ... You're forgetting the 2003 letter written by TRAI! TRAI had said there should be no cap provided spectrum was available. We reiterated that.  

But you knew how much 2G spectrum there could possibly be and knew how much would be required eventually. Why did you allow new people?

The reason why we were not emphatic at that point of time was that the new provisional tighter norms on subscriber allocation recommended by us had not been accepted. Also, the availability has to be calculated by those issuing the license, it's not our job.  

The finance ministry objections?

There is no difference on 3G ... we're also in favour of auctions. As for the 2G price, we've also said it should be looked into.

Do you seriously believe that the Rs 1,651 crore charged in 2001, when India had only 4mn subscribers, was the correct price in 2008 when 4mn subscribers are added in less than two weeks?

The price was not our mandate, but we said on our own, please revise the price. We couldn't have recommended auction because in India we bundle the license and the spectrum.  

You've floated a consultation paper on MVNO. Why? This requires operators to have excess spectrum. By your own admission, there is none.

Who says MVNO is only spectrum? You can sell your time. I think there is scope for MVNO business.  

Is the Tata-Virgin deal an MVNO and is it legal?

I certainly can't say it is illegal since the DoT has accepted it.  

Some months ago, you went public about the government cherry-picking, even suggesting you could take the government to the TDSAT. What happened since the government continues to do what it wants? But there's a calm now.

You should welcome that! I think there's now a better appreciation of the TRAI Act and now references are being made to us. In seven days, we'll also put out the status of each one of our recommendations. There's been a fairly satisfactory resolution of issues.  

What resolution? The DoT has ignored you on M&A. You said the new licensees couldn't sell for three years; the DoT's allowed acquisitions even though mergers are ruled out. So, an AT&T, for instance, can go and buy Unitech now...

I'm not sure why the DoT has talked of merger and not acquisition, since in two places, they use both together. As for AT&T, it could always buy 74 per cent of Unitech even earlier. I think we can live with the M&A guidelines.

Haven't you been unfair to the broadcasters as their income from CAS and DTH is fixed, while what they pay as carriage fee is not regulated?

There are a lot of complaints about carriage fee and broadcasters say that they are being blackmailed. We are looking into it. We haven't missed the point but there is no plan to actively regulate it.

DTH is allowed to buy channels on a la carte basis from broadcasters but doesn't sell to the consumer on that basis. Why?

They cite technical reasons for it but it is not that they cannot do it. However, despite the RIO (reference interconnect order) between the broadcaster and the DTH player, the broadcasters continue to insist that their bouquet be taken as a package. TRAI has given a model which says that DTH should be able to buy channels independent of their bouquets. But broadcasters, whatever they may say, are still forcing their bouquets.

You are preparing recommendations for television audience measurement. Isn't that really getting into micro-management of the sector?

We are certainly not recommending that a licence should be created for TAM. All we can suggest is an indicative guideline for such agencies to operate. We do not have the power to regulate them.

Will you determine their sample sizes?

As a guideline we can say that the sample should be of a certain size. We should cover all the states. The measurement should be a ready reckoner rather than give data on a seven to 10 days' basis.

But this is micro-management.

No. We will say that this may be considered, however, the decision should be left to the agency. When the government asked for suggestions, there was a strong opinion that we should return the reference.