Trai role crucial post-2G ruling
The post–Supreme Court ruling on the cancellation of 2G spectrum allocated to telecom firms in 2008, the role of telecom regulator, Trai has become important on how it moves forward to restore investor confidence in the Indian market in allocating airwaves through the auction route.
One of the major objectives of Trai is to provide a transparent policy environment to the telecom sector.
The regulator issues directions on various subjects like tariff, interconnections, Direct To Home (DTH) services and mobile number portability, to name a few.
Now, in the wake of the Apex court’s judgement that Trai’s methodology adopted in recommending grant of 2G spectrum has suffered from several deficiencies, the regulator has to be extra cautious in suggesting new tariffs for future allocations. Experts are of the view that Trai’s future recommendation must strive to fetch investors’ trust than fetching a few buck more to the exchequer.
According to the Department of Telecommunication (DoT), the auction price should be fixed in line with the immediately preceding auction, which was 3G auction in 2010.
This will prove to be very expensive for 2G spectrum. According to Mahesh Uppal, director, Com First (India), the reserve price at the auction should not be fixed at a very high rate.
“Fixing high reserve price will mean not every player in the market is allowed to participate in the bidding process. It will not be commercially viable,” Uppal told Deccan Herald.
But, there is another risk in fixing prices too low. Telecom analysts say, the government will again be accused of selling airwaves at throw away prices.
“Trai has to tread carefully in winning the government its revenue and the investors trust,” a former telecom official said.
“All this was done in the name of growth, affordability, penetration of wireless services in semi-urban and rural areas… but due to low prices fixed for the spectrum, the telecom companies made huge profits by off-loading their stakes to foreign firms,” the Bench said.
