Spectrum auction for Indian telecom service providers is set to hit major roadblocks as the Telecom Commission asked regulator TRAI to review its recommendations.
Earlier, TRAI in its recommendations said the BJP Government should release enough spectrum before the next round of auction which is slated to take place before March 2015. TRAI has the support of major telecom operators such as Bharti Airtel, Vodafone, Idea Cellular and Reliance Communications.
Telecom Commission asked TRAI to review its recommendations because an internal committee of the Department of Telecommunications (DoT) rejected the telecom regulator’s recommendation to conduct the next round of auction after keeping enough spectrum. The DoT internal committee does not have any clue on when additional spectrum will be vacated by the Defense.
The current issues show that the new government headed by Prime Minister Narendra Modi is unable to resolve the major demand of telecom operators. The tragedy is that the current defense minister Arun Jaitely and telecom minister Ravi Shankar Prasad are not giving enough attention to the spectrum issues which are the backbone of India’s digital life.
Bharti Airtel chairman Sunil Mittal on Thursday asked the telecom ministry headed by Ravi Shankar Prasad to release more spectrum before the auction. Earlier, CEOs of Bharti Airtel, Vodafone, Reliance Communications and Idea Cellular demanded stopping the auction due to lack of enough spectrum.
The DoT committee feels that there is no point in stalling the sale of what is already available, Hindu Business Line reported.
Hemant Joshi, partner, Deloitte Haskins & Sells, said: “The TRAI is right in asking the GOI to conduct auctions when enough spectrum is available else it could lead to unduly high so called market discovery of prices. Inadequate spectrum offer could lead to aggressive bidding, which would not be in the interest of the industry or the consumers and will adversely impact the Digital India program of GOI.”
In its recommendation, TRAI said Defense department should vacate the spectrum in the 2,100 MHz band. In addition, TRAI proposed that BSNL, a state-run telecom operator, should surrender 1.2 MHz spectrum in the 900 MHz band.
During the next round of auction, telecom operators are expected to renew their license in 11 mobile circles in the country to run the wireless business. If they do not get enough spectrum in the important 900 MHz band, these operators will face the music. The amount of spectrum being put up for auction early next year is less than the 2G spectrum currently being used by mobile operators whose licenses are due for renewal.
A media report said Vodafone and Idea Cellular together have 14 MHz in the 900 MHz band in the Maharashtra cirlce, which will be put up for auction. If either of these operators is unable to win back the existing holding then there will not be enough spectrum in the 1800 MHz band to fall back on.