Rahul Khullar new TRAI chairman; Sarma leaves with a sting in the tail

In classic Indian government style, it finally went down to the wire. On Saturday, JS Sarma completed his three-year term as chairman of the Telecom Regulatory Authority of India (TRAI). He also submitted a 60-page response to the clarifications sought by the Department of Telecomunications (DoT) on April 23.

On Monday, 14 May current commerce secretary, Rahul Khullar will take over as TRAI chairman.

However, Sarma did not show any leniency to operators as he went. In his reply to the DoT, there is no reduction in the reserve price that he suggested. Also, in the first auction, only one operator will get spectrum in the 1800MHz band. That is because Sarma has reserved spectrum in the 1800MHz band for refarming. Starting 2014, licences of operators with spectrum in the 900MHz band will expire.

Only in the case of CDMA operators, he has suggested where enough spectrum is not available, the reserve price should be 1.3 times the price of 1800MHz band spectrum. Earlier he had recommended it as double the price of 1800MHz band spectrum.

Lastly, as a parting shot, Sarma has raised the spectrum usage charge to 3% from his original recommendation of a flat 1%.

It remains to be seen what DoT does with the suggestions. It is not imperative for DoT to accept the recommendations.

It is believed that DoT will just opt for the auction of 1800MHz spectrum and junk all the other suggestions. That would be taken up by Khullar. Also, now that former telecom secretary Siddharth Behura is out on bail, there is a feeling that the worst is over for the sector.

Let's hope Khullar can do what no other regulator has managed till date--be strong and draw the road map for forward looking policies.

Raja moves bail application

It is action time again.

More than three months after the Supreme Court cancelled 122 licences issued in 2008, the doors seem to be opening for the prime accused in the 2G spectrum qallocation case.

After being in Tihar Jail for over a year in the 2G spectrum case, former telecom secretary Siddharth Behura was granted bail today. Immediately after the court granted bail to Behura,  his boss and former telecom minister Andimuthu Raja who has been in jail for the past 15 months moved a bail application. Raja is the prime accused in 2G spectrum allocation case. His plea will be heard on Friday, 11 May.

With Behura getting released, Raja is the only one still in jail. He was charged with conspiracy, cheating, criminal misconduct and abusing an official position in the allocation of 2G spectrum licences which were believed to be rigged.

Raja said he should be granted bail as he is unable to put his case before the Public Accounts Committee (PAC) of Parliament and the Joint Parliamentary Committee (JPC) which is looking into the various aspects of the issue.

The interesting days are just about to start.

Will this chaos lead to some good?

It has been a long time since I have been here. However, quite like India, the telecom scene in India also is a case of change, but yet no change.

We are currently in the midst of a proposed New Telecom Policy. That it was supposed to come in 2011 is a different issue. The action started after the Supreme Court cancelled 122 licences issued to eight operators in 2008. It wanted the government to auction all spectrum in future. With the SC getting into the act (everything needs a push from the SC)the Department of Telecommunications, the Communications ministry and the Telecom Regulatory Authority of India (TRAI) are looking to clean up the mess.

Isn't that expecting too much.

Well, this time round, TRAI managed to spook it further. First it recommends a reserve price of Rs 3,622 crore per MHz for 1800 MHz band spectrum. That's a reserve price of Rs 18,100 crore for 5MHz of spectrum. Two, it ensures that only one block of 5MHz is up for auction, despite the fact that the SC had cancelled licences of eight operators. Third, it ensures that there will be spectrum re-farming in the 900 MHz band.However, it suggested that operators need to pay only a quarter of the discovered price in the auction immediately. However, that is unlikely to pass muster with the DoT and the empowered Group of Ministers.

What it has done is make almost all operators are unhappy. The new ones hate it because there is only one band in each circle at a huge price. Of the eight operators whose licences were cancelled, at least three have exited. Two are incumbents. So that leaves three new operators--Uninor, Sistema Shyam and Videocon Telecommunications in the fray. The original incumbents find the new reserve price for both 1800 MHz and 900 MHz band too high. The operators who came in between need to re-farm their 800 MHz band.

But is everything all that dark? Not really. DoT is speaking to the defence ministry to vacate spectrum so that at  least three licences can be given in each circle.

So, is this the beginning of a new dawn? Maybe, since the SC has brought in the first wave of consolidation. The next few months should see more action.

Stay tuned. I am back to keep you updated on the go.