Telecom Associations Leave No Stone Unturned Ahead of eGoM Meet

By June 5th, 2012 AT 1:23 AM

The telecom operators bodies are leaving no stone unturned ahead of the empowered Group of Ministers (eGoM), which is slated to meet on today to decide on allocation of 2G spectrum and pricing.

Telecom Associations Leave No Stone Unturned Ahead of EGoM Meet

On its part, Association of Unified Telecom Service Providers of India (AUSPI) has shot a letter to the Finance Minister stating it is extremely concerned on high spectrum price as recommended by the telecom regulator.

“AUSPI is extremely concerned regarding high spectrum price of TRAI recommendation which is far from societal market realities. TRAI has given justification for the high reserve price by creating concept of `liberalised’ spectrum with extremely aggressive outlook for dataservices consumption and data services revenue,” the lobbying body for dual-technology and CDMA operators said in its letter.

The Telecom Regulatory Authority of India (TRAI) is the country’s telecom regulator, while the Department of Telecommunications (DoT) is the licencor. Indian consumer market is not at all ready and would not yet be ready for quite a few more years for such high data revenue projections, it added. Market now needs more 2G services driven by growth of voice services for serving suburban poor and also for meeting 100 per cent rural tele-density, it said.

According to AUSPI, the reserve price per MHz for 1800 MHz band is “extremely high”. For optimal outcome of fair auctions based ultimate price, reserve price level should be such that it should lead to free market discovery of ultimate price by making available fair number of slots of 1800 MHz for 2G Auction.

AUSPI has suggested that reserve price should be fixed at the level of reserve price of 3G, which is Rs 3,500 crore for 5 MHz. Any higher reserve price beyond that would not be “economically justified due to high tariffs and the resultant impact of steep fall in average revenue per user (ARPU).“We understand that the spectrum reserve price and auction is set for the 20 years of right to use period for the spectrum,” it added.

The rival operators body, Cellular Operators’ Association of India (COAI) wants the government to take an independent look at the telecom regulator’s and the industry’s views on spectrum auction. 

COAI is the industry representative body of incumbent operators including Bhari Airtel, Vodafone India and Idea Cellular.The Telecom Commission, the highest decision making body of the telecom ministry, on May 26 had asked TRAI to come up with telecom circle-wise analysis on the impact of spectrum price recommended by and consider points made by the industry.

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