DoT asks Trai to send its analysis before EGoM Meet on June 5 -Governance Now

DoT asks Trai to send its analysis before EGoM Meet on June 5

Telecom companies had been opposing Trai's recommendation to hike tariff

PTI | May 31, 2012

The Department of Telecom has for the second time asked telecom regulator TRAI to make a detailed analysis of the impact of its recommended spectrum price on mobile phone tariffs in each circle before the meeting of Empowered Group of Ministers on June 5.

TRAI had previously said that impact on tariff will be in the range of 1.5 paise to 4.4 paise per minute on all India basis of telecom players are made to pay spectrum base price recommended by it.

The regulator has recommended Rs 3,622 crore for each megahertz (Mhz) of spectrum in frequency bands being used for 2G services where a new company will have to buy at least 5 Mhz spectrum to start its services.

This amounts to over Rs 18,000 which is approximately 10 times higher than the amount company paid for starting telecom services in 2008 when A Raja was telecom minister.

The recommended price has been criticised by industry players saying that the recommended price will lead to tariff hike in the range of 30 paise to 100 per cent on circle to circle basis.

DoT has sent around 32 representation made to it by industry players including those which pointed out flaw in Trai's calculation on tariff impact, refarming, roll-out obligation and others.

The Department has asked Trai to look into international experience with respect to ratio of spectrum price and its impact on tariff.

The telecom department has also sought comment of Trai on Telecom Commission decision to consider market determined price for period of 10 years instead of 20 years recommended by it.

Telecom Commission has decided to reconsider price of spectrum after period of 10 years without interfering in the price of spectrum which will be allocated for period of 20 years after auction due before August 31.

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