Telecom Lead India: Airtel,
Idea, Vodafone, Uninor and Videocon have approached Telecom Minister Kapil
Sibal expressing their concerns over TRAI’s spectrum recommendations.
CEOs of these five telecom companies said the reserve price
proposed by the telecom regulator should be reduced by at least 80 percent.
If the auction is held at the proposed price then mobile
tariffs will go up by 25-30 percent, they said in a letter to India’s telecom
minister.
TRAI spectrum policy will affect mobile broadband growth in
India: GSMA
Recently, GSMA said that TRAI’s spectrum auction
recommendations will escalate mobile spectrum cost and affect mobile broadband
growth in Indian telecom market.
At present, broadband customer base stands at around 14
million in India. TRAI suggested that the 700 MHz spectrum should be auctioned
in 2014. This will affect the mobile broadband expansion plans of major
operators such as Bharti Airtel, Vodafone, Tata Teleservices, Idea Cellular,
among others.
It interesting to note that companies such as Airtel,
Idea, Vodafone, Uninor and Videocon are joining hands to
reduce the reserve price.
Recently, the competing industry associations COAI and AUSPI
sent letter to telecom minister to reduce the reserve price of the telecom
spectrum.
According to a report in Hindu BusinessLine, CEOs of the
telecom companies sent a 5-point demand to the Telecom Minister including
putting all available spectrum on the block as against 5 Mhz suggested by TRAI.
“Holding back 80 per cent of the available spectrum will
result in a totally unrealistic and inflated market value caused through
creation of artificial scarcity. By severely throttling the supply to 5 Mhz,
TRAI is trying to artificially distort the auction result,” the joint letter
signed by the five CEOs said.
The high cost of spectrum will translate into a much higher
tariff for consumers. It is estimated that tariffs will go up by at least 25-30
per cent. The high auction price, if at all paid, will not leave any resource
in the hands of the operators to do the required network rollouts, according to
telecom operators.
TRAI has pegged the base price for 1800 Mhz frequency band
at 10 times the price in 2010.
The operators said the TRAI proposal, if accepted, will
sound the death knell for Indian telecommunications and also lead to prolonged
disputes and litigation. The Indian telecom companies meanwhile got
international support.
Recently, Franco Bernabè, chairman and CEO of Telecom Italia
Group, said that efforts to squeeze money out of mobile operators for some
perceived short-term gain will only reduce investment in networks.
