Mulayam writes against reduction of spectrum price to PM

Samajwadi Party chief Mulayam Singh Yadav has written to Prime Minister Manmohan Singh saying the government should not give into demands of certain telecom companies which want the minimum price set for spectrum auction reduced.

Sector regulator TRAI, which has recommended a base or minimum price for spectrum auction of Rs 3,622 crore per MHz, has "stressed that the reserve price will not impact the telecom operators adversely," Yadav wrote on June 20.

The tariff increase on account of the spectrum charges would not be more than 5 paisa per minute while the Government would gain Rs 700,000 crore in next few years, he claimed.

"Rs 7,00,000 crore is a huge amount to be forgotten by the government just because of misleading calculations being given by the operators showing inflated costs and deflated revenues," he wrote.

Yadav, whose party lends outside support to the UPA government at the Centre, said some telecom operates were lobbying hard to pressurise the government for reduction of the reserve price. "The calculations of TRAI and the recommendations of DoT's internal committee show that neither there would be any adverse impact on the telecom operators on account of this fee nor there would be any significant increase in tariff," he said.

"Therefore, the contention of telecom operators for reduction of reserve price is nothing but a ploy to not to pay revenue to the Government". The revenue generation of Rs 7 lakh crore through sale of spectrum is an estimate based on the steep minimum airwaves price recommended by Telecom Regulatory Authority of India.

Telecom operators have opposed TRAI recommended minimum price of Rs 3,622 crore for a megahertz of airwaves that are used for transmitting wireless signals for mobile telephony services. They say, a new operator will have to over Rs 18,000 crore for pan-India operations which is around 10 times high than what companies paid in 2008 when A Raja was the telecom minister.

Service providers have said that if these price are approved by government then existing telecom tariff will rise up to 100 per cent while TRAI has said that the tariff may go up by 4.4 paise per minute.

Yadav said the government needs large sum of money for the development activities in the country particularly in the economically weaker states.