The Telecom Commission has told the telecom regulator to recommend the reserve price for the 800 MHz band within 15 days.
The Commission wants to finalise the base price for this band so that it can be put up for auction along with 1800 MHz and 900 MHz bands by early 2014.
The TRAI had initially proposed that the 800 MHz band should not be auctioned so that it can be used for GSM services.
However, this frequency band is currently used by CDMA operators, including Sistema Shyam, Reliance Communications and Tata Teleservices. These operators objected to the TRAI proposal on grounds that it would block their future roll out.
The Telecom Commission, which met on Wednesday, decided to over rule the TRAI. “Keeping spectrum in the 800 MHz band unsold would result in foregone revenues for Government and it may be appropriate to put the spectrum to auction and allow market forces to determine the appropriate technology solution using the liberalised spectrum,” stated the minutes of the Commission’s meeting seen by Business Line .
ROLL OUT
The Commission has also decided to modify the roll out obligation of telecom operators in a bid to ensure that all villages are connected. There are 50,000 more villages that are yet to be covered by mobile operators. The TRAI had proposed to change the existing roll out obligation, which is based on geographical coverage, to a system where operators have to roll out services based on population.
Though the Commission has agreed with the TRAI’s basic principle of reaching telecom network to everyone, it has not favoured a change in the geographical coverage. The panel has asked the Universal Services Obligation administrator to redefine the roll out obligation to meet TRAI’s objectives.
SPECTRUM CHARGE
On spectrum usage charge, the Commission noted that the current levy was not uniform and a rational levy needs to be evolved.
The TRAI had proposed to fix a flat fee of 3 per cent of operators’ annual revenue for using spectrum.
This was opposed by an expert committee of the Department of Telecom on grounds that it would be against the rules announced for broadband spectrum auction in 2010.
The Commission has asked the DoT to discuss the issue with the Finance Ministry.
While clearing the policy for mergers and acquisition in the telecom sector, the Commission has taken a view that the three-year lock-in on promoters’ equity should be removed.
However, if any player sold out stake within the first three years then the DoT will collect a fee based on the valuation of transaction.
The lock-in period was introduced to prevent fly-by-night players from making windfall gains by selling spectrum at market price after acquiring spectrum from the Government under the first-come-first-served policy.
But since fresh spectrum allocation is being done only through auction and older players that had got spectrum under the earlier dispensation have completed more than three years, the Commission has decided that the lock-in period is not necessary.