Telcos move TDSAT over Trai proposal

Source :BS Reporter / New Delhi May 25, 2010, 0:16 IST

India’s three leading GSM operators today challenged the recommendations of the telecom regulator on second generation (2G) pricing before the Telecom Disputes Settlement and Appellate Tribunal (TDSAT).

Bharti Airtel, Vodafone Essar and Idea Cellular moved a petition against the recommendations of the Telecom Regulatory Authority of India (Trai) on spectrum management and licensing, including pricing of 2G spectrum.

The petition questions the terms of reference given to Trai by the department of telecommunications (DoT) and the process followed by Trai, which varies from what it was asked to do, an operator said, requesting anonymity. A Vodafone Essar official confirmed the company had filed the petition before TDSAT, but refused to share details.

In its proposal given on May 11, Trai had suggested sweeping changes in the telecom landscape. The regulator had recommended that operators who had spectrum beyond 6.2 MHz should pay a one-time fee for the excess. This fee, Trai had said, should be equivalent to the price arrived at the auction for third generation (3G). It had also recommended that operators pay the market rate for spectrum when their licences came for renewal.

Trai had also suggested that operators on the 900 MHz band be re-farmed to the 1,800 MHz one, so that scarce spectrum was made available to the government for 3G or 4G auctioning.

GSM players have criticised Trai recommendations, with some operators even terming these “retrograde” and “absurd”.

Following the criticism, Trai wrote to DoT, saying it was studying the proposal to link 2G price with 3G. The regulator also initiated talks with industry players over the issue.

“I have asked the operators to give their views on linking 2G price to 3G by June 15. We plan to finalise the process by July 15,” Trai Chairman J S Sarma had said.

If the government accepts Trai's proposal, telecom operators with more than 6.2 MHz may have to pay more than Rs 17,000 crore to keep the excess spectrum. Operators may also have to together pay Rs 100,000 crore when their 2G licences come up for renewal between 2014 and 2021.

Trai, however, had also proposed measures which would help operators save money.

Among them is a proposal to introduce a uniform fee for telecom licences across all circles. Trai has also suggested that the licence fee should be brought down to 6 per cent by 2014 from the current 8-10 per cent.