It took the babus in the Department of Telecommunications (DoT)30 days to pore through the recommendations of the Telecom Regulatory Authority of India (TRAI) on spectrum pricing. At the end of that, the Telecom Commission is doing everything it can to wipe the smiles off telecom operators. The nine-member panel of the Telecom Commission has endorsed the DoT suggestions. The suggestions go all out to favour just one company that has yet to formally launch services.
Despite the fact that there were no bidders in the March 2012 auctions, the Telecom Commission is not in favour of a sharp cut in the base price for spectrum. TRAI had recommended a 46.6 per cent cut in the base price for 5MHz of nationwide spectrum in the 1800MHz band. That makes eminent sense. What the TC should realise is that there is a world of a difference between the base price and the discovered price in the auction. What a lower price does is intensify competition. But then the babus are not known for their knowledge of economics, unless it relates to them personally.
Two, it has issues on a flat spectrum usage charge (SUC) of 3 per cent. DoT argues that since revenue from auctioned and non-auctioned spectrum cannot be segregated, it is impossible to do so. Currently operators pay anything between 1 to 8 per cent depending on the amount of spectrum they have. Considering that the country managed to clean up its import duty structure by reducing the levels, it can be done in telecom too. After all, one need not pander to the whims of one company.
Three, it has questioned the need to open the eGSM band for GSM services. That's surprising since the number of CDMA subscribers has been falling for years. What opening up eGSM will do is provide an additional 10MHz of spectrum in the coveted 900MHz band. It would ensure that people get better services. Choking the pipe will only raise the burden on operators. Not opening is a great idea if all that the government wants is one operator while all others shut shop.
What happens to consumers? And the amount of jobs lost in a slowing economy? It's time the TC thought about the needs of the country rather that of a couple of companies that have all along tried to bypass the system.
Isn't it time that the TC stood up for the needs of a billion people demanding better and faster connectivity?
