Telecom company Uninor and Cellular Operators Association of India (COAI) have cried foul on Telecom Regulatory Authority of India (TRAI) recommendations on 2G auctions. They said the TRAI decision that would evict new operators and consumers' interests. TRAI on Sunday stuck to its earlier recommendations for auction of 2G spectrum in its responses to Department of Telecom, reiterating the base auction price at Rs 3,622 crore per Mhz for 1800 Mhz band. The Authority said that payment by telecom companies after winning auction is not practical.
However, it made a change in spectrum usage charges at three per cent from earlier recommended one per cent. “It has been obvious for some time that the solutions will have to come from the political leadership of the country. These must be such that billions in investments and committed foreign investors are not forced out of India,” Uninor said in a statement. According to COAI, the regulator has ignored the industry representations. It would be “A definite death knell,” said Mr Rajan S Mathews, Director General, COAI.
TRAI's price recommended in the 1800Mhz band was about 10 times higher than the cost of licence that came bundled with 4.4MHZ spectrum paid by new players in 2008 at Rs 1,658 crore. For CDMA (800 Mhz) and GSM services (900 Mhz), TRAI proposed reserve price at Rs 7,244 crore that is almost double the amount kept for 1800Mhz band. It also said that 5MHz of spectrum would be auctioned in every circle. TRAI also suggested re-farming of spectrum, which would mean replacing of 1800 Mhz band from 900 MhZ at higher prices.
FDI limit: The Authority has also suggested bringing down the foreign direct investment limit for infrastructure providers for telecom services to 74 per cent within a period of three years once Unified Licensing regime comes into force. The FDI limit to such providers is 100 per cent right now.