The Telegraph
Monday , June 4 , 2012
Since 1st March, 1999
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Signs of spectrum sale delay

New Delhi, June 3: The spectrum auction is likely to get delayed as the Telecom Regulatory Authority of India (Trai) needs to consult the industry before giving its views on fixing the price of airwaves for 10 years instead of 20 at present.

The department of telecom (DoT) has asked Trai to weigh the possibility of giving spectrum for 20 years, with upfront payment for 10 years. The remaining amount will be paid based on the market-determined price after 10 years. This will translate into more revenues for the government but lower income upfront. Under the new telecom policy, spectrum will have to be bought separately from the licence based on the market price.

Industry players are not in favour of the move as it “introduces a degree of uncertainty in a telecom company’s business plan since spectrum price after 10 years cannot be predicted”.

The Association of Unified Telecom Service Providers of India — the lobby group of dual-technology operators — said the move might require licence amendments.

“Trai has never consulted on these issues before with the stakeholders. Considering the far-reaching impact of these issues on the sector and in order to meet the transparency requirement specified in Section 11 (4) of the Trai Act 1997, the authority is requested to finalise recommendations only after detailed consultation with the stakeholders,” Auspi secretary-general S.C. Khanna said.

The empowered group of ministers on spectrum, headed by finance minister Pranab Mukherjee, will meet on Tuesday.

Trai is expected to submit some proposals to the group before the meeting. The regulator has been asked to do a cost analysis of the impact its spectrum-pricing proposals will have on customers, companies and the government’s revenues and give the report before June 5.

Trai, in its proposals sent to the DoT, had suggested a reserve price of Rs 3,622 crore for every 1 megahertz (MHz) of spectrum in the 1,800MHz band.