New Delhi, Oct. 1 (PTI): An internal panel of the department of telecommunications has questioned Trai’s proposal to reduce the reserve price of spectrum up for sale by up to 62 per cent.
In its report submitted today, the internal panel of the DoT, headed by its member (technology), has suggested, “Trai may be requested to reconsider the recommended reserve price...” for 2G spectrum to be put up for sale in the proposed third round of auctions.
For 2G spectrum in the 1800 MHz band (freed after cancellation of 122 telecom licences), Trai has recommended almost 37 per cent reduction in the base price and for the 900 MHz spectrum — premium 2G band — the regulator has recommended a sharp reduction of about 62 per cent from the last reserve price.
The Telecom Regulatory Authority of India (Trai) had showed various scientific methodologies to arrive at a final price.
On the 1800 MHz spectrum price, the DoT panel said, “Deviation of various constants, co-efficient and variables to arrive at the reserve price... appears to be based on certain assumptions, on which no clarity could emerge from the recommendation.”
For the 900 MHz price in three service areas — Delhi, Mumbai and Calcutta — the panel said the recommendations were based on the price of the 1800 MHz band and “moreover, various assumptions ... have not been clearly spelt out in the recommendation. In this situation, the committee is not in a position to arrive at a conclusion”.
The panel feels Trai should also clarify the price of the 900 MHz band spectrum in the remaining 19 service areas of the country as well.
“The (internal DoT) panel has submitted its report. The panel was not for taking a decision but to understand the implication of Trai’s recommendations,” a senior government official said.
Trai has not suggested an auction of CDMA spectrum now as there was no demand for these airwaves in the last auction and only one company had participated in the March 2013 auction.
The DoT panel has also raised doubts about the implementation of the Trai recommendations to increase annual fee, spectrum use charges levied on wireless broadband (BWA) from 1 per cent to 3 per cent from April 1, 2014.
“In so far as the hike in spectrum use charges on BWA is concerned, it would be important to establish adequate rationale for such consideration... The committee observed that Trai’s recommendation to charge auctioned spectrum at a flat rate of 3 per cent does not appear to be implementable,” the report said.
Trai has recommended a reduction in the upper limit of spectrum use charges from 8 per cent to 5 per cent. However, the DoT panel said: “Trai has not provided any rationale or justification for arriving at the figure of 5 per cent as the highest slab rate.”
On spectrum trading, the committee has called for a holistic view by the government before allowing the mechanism.
The committee report will be placed before an inter-ministerial panel — the Telecom Commission — scheduled to meet on October 3.
“The Telecom Commission will take a decision on Trai’s recommendations and the committee report,” the official said.
The DoT will send the recommendations back to Trai for further clarifications if the Telecom Commission says so. Or else, the decision of the inter-ministerial panel will be put before the empowered group of ministers on spectrum matters, headed by finance minister P. Chidambaram.
The government has to conduct a third round of spectrum auction following a Supreme Court order that said all airwaves freed from cancellation of 2G licences in February 2012 should be auctioned.