In the wake of 'take decisions' backing by the PM in his meeting with secretaries on June 4th, the Department of Telecom (DoT) has said that it will be coming out with the final spectrum reserve fee for the controversial 800 Mhz by the begining of July.
“We are working towards this, based on the recommendations from various bodies including TRAI and the (DoT's) consultative committee on spectrum pricing and will come out with right pricing by early next month,” Telecom Secretary MF Farooqui told The Pioneer.
The controversial reserve pricing of the 800 Mhz spectrum has been a bone of contention for a long time. Telecom watchdog TRAI as well as the telcos in the segment decrying the exorbitant pricing of the band. Telcos have suggested that the reserve price for the 800 Mhz should be no more than Rs 1,816.32 crore per MHz. They say that the reserve price for the 800 Mhz should be 80 per cent of Rs 2,270.40 crore per MHz (which is the market discovered price) in the 1800 MHz band - which works out to Rs 1,816.32 crore per MHz. Farooqui, however, refrained from commenting on the likely price and said:”we are considering all the aspects on the issue.”
TRAI has, meanwhile, said that the 800 Mhz reserve price should be less than that of the 1800 Mhz prices. Telcos operating in the 800 Mhz band also hold that there has been an undue pressure on the Government from the GSM players to convert part of the 800 Mhz into extended GSM. “There is an excessive pressure on us to vacate some of the band for the GSM players,” say highly placed sources in the industry. This is seen by many as an indirect armtwisting of the players in the 800 Mhz so that the richer players in the 1800 and 2100 Mhz could enter the technologically superior 800 Mhz. There has also been allegations from various sections of the industry that the GSM players were putting pressure on the DoT to declare the 800 Mhz as a 'technologically poor bandwidth' so that they could corner the premium bandwidth at a cheaper price.
There have also been other contentious issues like that of imposing a uniform spectrum usage charge (SUC) of three per cent recommended by TRAI. On this the DOT committee has suggested that 'the regulator's proposal be delinked from the auction of spectrum, for which the current SUC might be used. But the Finance Ministry and the EGoM earlier, had debunked it. The DoT committee has also suggested a revenue-neutral model wherein it says that a uniform SUC should be determined. And the licence holder should have the freedom to alter the SUC, within the provisions of its licence agreement.' The DoT has also suggested that the frequent alteration in the rates should be avoided as it affected investor confidence in a big way.
Prime Minister Modi met Secretaries of various departments after taking up office and asked them to expedite decision making on various projects that have long delayed. In the telecom sector itself, the DoT has suggested measures to the Cabinet Secretary to improve the financial health of the sector which is struggling with a cumulative debt of around Rs 2 trillion. The DoT has also proposed a spectrum management policy last year to deal with issues such as spectrum trading and sharing and audits but was dropped by the last government.