In a strongly worded letter to Department of Telecommunication, COAI, the apex body of cellular operators associations in India, has unanimously rejected the TRAI’s latest recommendations on spectrum auction & favoring dual technology players over GSM players.
In press conference yesterday, attended by heads of Idea Cellular, Bharti Airtel, Videocon, Uninor & Vodafone India at New Delhi, COAI has pointed out the lapses in the regulator’s recommendation over various matters, including high reserve price of spectrum in 1800 MHz band and linking refarming of spectrum without implications of services & QoS disruptions.
COAI is seeking out intervention in following key areas in regulator’s recommendations:
- The recommended reserve price of 1800 MHz spectrum (Rs 3622 Cr) is much higher than 3G & BWA spectrum auction (held in 2010) and 10 times higher than 2G spectrum reserve price set by DoT in year 2007. Moreover, spectrum usage has to be technology neutral and operators should be freely allowed to choose technology for deployment.
- Regulator has made available only 110 MHz of spectrum in 1800 MHz band against available total 581 MHz spectrum. This has lead to resource scarcity leading to astronomical price rise of spectrum in 1800 MHz band. Regulator must bring entire available spectrum for auction.
- By holding more than 80{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} spectrum back for spectrum refarming in 1800 MHz band, regulator’s decision would result in loss of revenue to exchequer in coming years, but also lead to loss of services to more than 60{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} of mobile subscribers in the country, who are using spectrum in 800/900 MHz band. Moreover, refarming will lead to huge CAPEX & OPEX burden to operators, who mightn’t be in position to sustain the implications of refarming financially.
- Once the full market value of spectrum has been extracted by auction, the roll-out obligations, set by regulator needs to be scrapped entirely. The rollout obligations in economically unviable areas lead to loss of revenue for operators. Government must progressively use USO fund to support the obligation once spectrum price is market discovered.
- Regulator has continued to favor dual technology players (GSM+CDMA), where allocation of dual spectrum during Sep 2007 & Mar 2008 violates the cross holding obligation by these companies. But despite citing allocation of such spectrum arbitrary by Supreme Court, regulator has continued to explore possibilities to bypass norms.
The letter has already been submitted by COAI to DoT to review the regulator’s recommendations. We only hope that regulator, government & entire telecom ecosystem finds the stable equilibrium in each other’s position giving new life to already dilapidated Indian Telecommunication industry.
Interested parties can read the PR & detailed Annexure here.
