The finance ministry is opposed to the high base price plus auction route for the allocation of spectrum to telecom operators for rollout of 3G services as recommended by the Telecom Regulatory Authority of India (Trai).

According to sources, the ministry feels that if spectrum is auctioned after fixing a high base price, operators may bid aggressively which may lead to high cost of 3G services, which could, in turn, arrest the momentum of growth in the telecom sector.

The ministry, which had earlier also favoured a combination of auction and revenue share, will shortly send its comments on these lines to the department of telecom (DoT), which will be examining the Trai's recommendations and coming out with a policy in the next three months.

Earlier, GSM operators had also opposed the high base price proposed by Trai and had urged the DoT to lower it. Bharti group chairman and managing director Sunil Mittal has also supported a lower threshold level to make the services affordable.

The finance ministry's opposition to the high base price suggested by Trai assumes significance since any policy drafted by DoT will need to be approved by the full telecom commission, which is the highest apex body in DoT on policy matters. Full telecom commission has finance secretary as one of its members along with a representative from the Planning Commission. A veto by the finance ministry representative could make it difficult for the proposal to be approved, say sources.

When contacted, Planning Commission officials said they are yet to finalise their views on the subject. However, the Commission is concerned about the scarcity of spectrum and favours its proper usage. Further, since 3G policy requires inputs and comments from other ministries like defence and space also, it will need to be ratified by the Cabinet.

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