EGoM fails to decide on pricing of telecom spectrum
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The Empowered Group of Ministers (EGoM) that met on Tuesday said a minimum of 10 megahertz of spectrum would be auctioned but failed to take a decision on its pricing.
The Telecom Regulatory Authority of India (TRAI) was to submit its recommendations on the impact of TRAI’s recommended price on customers and the industry to the EGoM last week.
However, the regulator has not been able to submit its full report, sources said follwing Tuesday's EGoM meeting.
"Some decisions have been taken, we will let you know by and by," Telecom Minister Kapil Sibal told waiting reporters.
A decision on the refarming of spectrum, however, has been taken at the EGoM's meeting. Also, a maximum of 13.75 Mhz has been fixed as the maximum spectrum to be auctioned to ensure that at least two operators can come in.
The highly-watched meeting was expected to bring to an end the indecision over the pricing of spectrum scheduled to be auctioned later this year. The Telecom Commission, which met last week, had left the question of spectrum pricing to the EGoM, which is headed by Finance Minister Pranab Mukherjee.
TRAI had been asked to submit, circle-wise, the possible impact of spectrum pricing, impact on new and old telecom operators who wanted to convert their old spectrum to a liberalised version that allows them to use it for multiple services.
The TRAI report was also supposed to take into account if telecom companies will fully absorb the rise in spectrum price or pass it on to consumers. Telecom operators were also asked to send in their suggestions.
The Telecom Commission had also sought TRAI's view on whether pricing should be for 10 years initially given rapid changes in the technology. It had suggested that a licence be given for 20 years, while price could be re-evaluated after 10 years.
The telecom regulator had earlier announced new guidelines for the auction of telecom spectrum, drawing sharp criticism from telecom operators.
In its recommendations, TRAI had fixed the reserve prices for the auction of spectrum for 900 MHz was fixed at Rs 7244 crore, while that for 1800 MHz was fixed at Rs 3622 crore.
The prices is estimated to be 10 times higher than what was fixed during the first round of spectrum allotment in 2008 under the then telecom minister A. Raja.
Telecom companies have claimed that this reserve price is too high, and that buying spectrum at the new prices will result in a 100 per cent hike in charges for consumers.
TRAI had also recommended that it should be entrusted with the task issuing unified licences, and that a one-time non-refundable fee of Rs 15 crore should be levied for a national-level licence.
The auction of spectrum is being held at the behest of the Supreme Court, which in February 2012 cancelled 122 telecom licences and directed the government to hold an auction for spectrum, saying the allotment in the first round had been discriminatory.
The case also led to former telecom minister A Raja to be arrested for allegedly showing undue favour to some telecom companies. He was released on bail last month after being held in custody for 15 months.