Cyrus Mistry meets Sibal on Trai's auction recommendations

Cyrus Mistry meets Sibal on Trai's auction recommendations

Amidst industry chorus against the sector regulator TRAI's recommendations on auction of scarce spectrum, Tata Group chairman designate Cyrus Mistry and Tata Teleservices MD Srinath Narasimhan today called on Telecom Minister Kapil Sibal to discuss issues facing the sector.

Mistry and Narasimhan, who were closeted with Sibal at the minister's official residence here for about half an hour, did not offer any comments on the meeting.
Telecom Secretary R Chandrashekhar was also present at the meeting.

Telecom operators have already raised concerns about the steep hike in spectrum prices, which they say could lead to mobile phone tariffs going up by as much as 100 per cent in certain circles.

The Telecom Regulatory Authority of India (Trai) has proposed Rs 3,622.18 crore for one megahertz (MHz) as base or minimum price for pan-India spectrum in 1800 MHz for auction.

This suggested price is around 10 times higher than the floor price at which the former Telecom Minister A Raja had allocated spectrum and licences in 2008.
Also, Trai has suggested that the reserve price for 800 MHz (CDMA) and 900 MHz (GSM) bands be at least 2 times higher than that of minimum price for 1800 MHz band (also used be GSM operators currently).

The Telecom Commission, which met on May 26, has left the decision on pricing to the Empowered Group of Ministers (EGoM), which will meet on June 5, Telecom Commission Chairman and Telecom Secretary R Chandrashekhar told reporters here.

The Telecom Commission has also asked Trai to conduct an analysis of the impact of spectrum price on tariff if it is passed on and in case it is absorbed, then what is the effect on companies' businesses, viability and return on investment.

This analysis, along with Trai recommendations, would be submitted to the EGoM for its decision.

Meanwhile, GSM operators' lobby COAI has alleged that Trai has favoured Tata Teleservices by excluding the GSM spectrum allocated to it in 2008 while calculating the available spectrum for auction. TTSL offers both CDMA and GSM services.

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