Open to talks,ready to reduce 2G prices: Trai

Trai said it was open to dialogue and even willing to bring down charges for excess 2G spectrum.

The Telecom Regulatory Authority of India (Trai) today said it was open to dialogue and even willing to bring down charges for excess 2G spectrum that established telecom majors such as Bharti Airtel,Vodafone Essar and BSNL hold.

In its recommendations on Spectrum Management and Licensing Framework announced on May 11,the regulator had linked charges for excess 2G spectrum to the prices of 3G spectrum,auction for which is currently on.

J S Sarma,Chairman,Trai told The Indian Express: The jury is not out on 2G price. I can always bring it down.

The Trai,in its 432-page report,had said the government was contractually obligated to allot only 6.2 mega hertz (MHz) spectrum to all operators. However,the government,through periodic executive orders,allotted additional spectrum to players based on their subscriber numbers.

Bharti,Vodafone and BSNL,for instance,hold 10 MHz in most key circles. To level the playing field given the constraints of spectrum availability,12-14 companies in each circle,the relative strengths of players in the market Trai had said that operators holding spectrum over 6.2 MHz and up to 8 MHz would have to pay a one-time additional charge,at the current price of 3G spectrum. Beyond 8 MHz,the price would be 1.3 times the current 3G price.

This led to an outcry in the industry with the stock prices of most telecom companies getting battered. Bharti,Vodafone,Tata Tele and Idea Cellular,slammed the recommendations as arbitrary and retrograde. They claimed the move punished the established players and would push up costs for subscribers.

Sarma reckons that linking the price of excess 2G spectrum to 3G spectrum,auction for which is on now,has a drawback. The price being discovered for 3G may be absurd because only little spectrum or just 15 MHz of the total availability of 60 MHz with the Defence department,has been put to bid. But,he said,when India had administered prices,the market clamoured for auction. In auctions,it is true that the best value is realised only when the spectrum is scarce. Now,what do you do? he said.

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The regulator said he was willing to sit and address the industrys grouse. I am meeting the telecom operators coming Thursday at my office, he said,adding he would be talking to telecom analysts too next week. He has also called a meeting of technical experts and economists in Bangalore next month to discuss how best to price 2G spectrum. He,however,added that this did not mean Trai had changed its position.

According to Trai,the revenue impact on operators with extra spectrum amounted to only Rs 14,500 crore and not Rs 35,000 crore as has been made out. Bharti will have to pay Rs 3,500 crore,Vodafone Rs 2,849 crore,MTNL Rs 2,669 crore,Idea Rs 1,066 crore and BSNL Rs 3,040 crore.

In every circle,only 2-3 of the 12-14 operators are being charged. I have ensured adequate competition in each circle and this will keep prices low. Consumers will not suffer, Sarma said.