GSM cos cry foul on TRAI's spectrum proposals

Anil Ambani-led RCOM, the second largest mobile operator, was the only one to welcome the regulator's recommendation that operators should pay for 2G spectrum (radio waves) on par with 3G rates.

The government as recently as two years ago gave away pan-India 2G spectrum at Rs 1,651 crore, compared to 3G that has so far attracted a bid of over Rs 14,000 crore, and the quotations could go up further by the time the auction closes.

Those who are opposed to the recommendations argue that implementation of this would hurt the consumer hard.

"The latest recommendations by TRAI for allocation of 2G spectrum are shocking, arbitrary and retrograde. They overturn all existing policies of the DoT of the last 15 years, recommendations made by various government committees and even TRAI's own earlier recommendations," said Bharti, the country's largest mobile operator.

TRAI yesterday said operators with over 6.2 Mhz of spectrum will have to pay for the additional radio waves they are holding at the current market price, which will be linked to the 3G price.

If implemented, this will be a big blow to GSM players like Bharti Airtel, Vodafone Essar and Idea that have well over 6.2 Mhz of spectrum and will have to cough out more to retain the additional radio waves.

Vodafone Essar said the proposals are retrograde for the industry and against the interest of consumers.

"VEL is deeply concerned that the TRAI recommendations have deviated fundamentally from the holistic, forward looking spectrum reform framework recommended by the Expert Committee set up by DoT that TRAI was tasked with considering", it said.

Marten Pieters, MD, VEL said: "The telecom industry has seen very little revenue growth in the last 6 quarters, and has been impacted by unprecedented price wars".
Bharti's stock fell 8.29 per cent to close at Rs 261 on BSE today, following TRAI's recommendations. SingTel owns 32 per cent in Bharti Airtel. VEL is not listed.

On the other hand RCOM said the proposal are progressive and consumer-centric.
"TRAI recommendations would lead to spectrum efficiency and rural penetration. The Government would be able to release additional spectrum," Syed Safawi, CEO, wireless business, RCOM said in a conference call.

Safawi said incumbent operators would have to pay for the excess spectrum beyond 6.2 Mhz which could go up to Rs 10,000 crore and they could face huge operational expenditure and capital expenditure.

He said RCOM, which offers both GSM- and CDMA-based services, does not have to pay much for the excess spectrum, which could be just Rs 22 crore.

Tata Teleservices, however, said that the recommendations of TRAI on 2G spectrum have not brought in level playing field and has not addressed the inequalities in spectrum allocation and issues of excess spectrum beyond 6.2 MHz.

Tata Teleservices has been waiting for 2G spectrum allocation in Delhi and many other key Indian cities for the last more than 30 months now, it said in a statement.