After burning hands in the 2G and 3G spectrum allocation, India's Mobile service operators are now standing more to lose. Most of operators have opposed sectoral regulator Telecom Regulatory Authority of India's (TRAI) recommendations of a base price for auction of 2G spectrum that is higher than the 3G price set in 2010.
TRAI's move may also hurt Uninor (Telenor) and MTS India (Sistema Shyam Teleservices) which had lost 2G licences after SC canceled 122 licences awarded by Ex telecom minister A.Raja and were planning to rebid. Even leading mobile service providers like Vodafone India & Bharti Airtel which have been around since 1994, could be hit.
Some telecom experts who are unhappy with the TRAI's recommendations says if mobile service providers were to start charging for the kind of bids at high rates, mobile call rates for Local and National may go up to Rs.2 to Rs.5 per minute from current tariff as low of 30p to 50p per minute.
In first reaction on TRAI's recommendations, country's leading mobile service provider Vodafone India said in a official statement " We believe that several of these recommendations are retrograde and if accepted, will do irreparable harm to the industry. It will hamper the ability to connect the unconnected and goes against the objectives of National Telecom Policy of ensuring improved rural tele-density and right to broadband."
GSM and CDMA operators association - COAI and Auspi issued a joint statement criticizing TRAI’s recommendations “Trai’s actions seem to be directed towards creating unnecessary constraints for the sector, overlooking the universal rules of sustainability and growth for this sector. Under such inconsistent, regressive and uncertain regulatory environment, it is inconceivable that the telecom industry, which is already in a state of doldrums, will be able to deliver on the Government’s vision of affordable communications, rural penetration and roll-out of data services."
However, TRAI Chairman JS Sarma said that Telcos have to utilize spectrum efficiently, high quality spectrum cannot come cheap. We have liberalised the spectrum, therefore it is capable of taking up any technology and you are not constrained by GSM technology. So, that is the reason why we have done that."