Assocham Urges New Government to Auction Available Spectrum at Earliest

Pitching for an auction of all available spectrum at the earliest, industry body Assocham on Tuesday said the government is losing Rs. 2 lakh crores every year on account of spectrum that is lying idle.

"We have urged the new telecom minister (Ravi Shankar Prasad) to immediately auction all available spectrum with socio-economic benefits valued at over Rs. 2 lakh crores (excluding proceeds from auctions) lying idle with the government," Assocham Chairman (National Telecom Council) T V Ramachandran told reporters in New Delhi.

(Also see: Spectrum auction: The complete list of winners)

He said the government should auction spectrum in 700MHz, 800MHz, 900MHz, 1800MHz and 2100MHz bands concurrently at the earliest and also declare a clear roadmap for all available spectrum.

Assocham also suggested to the government that in order to revive the investor sentiment, the government should bring down the burden of various duties and levies in the telecom sector.

"Currently telecom operators pay as much as 15 percent of their adjusted gross revenues (AGR) as license fee and other levies. We urge the government to reduce it by 1 percent every year for the next five years," Ramachandran said.

The systematic reduction will maintain revenue neutrality also as the government will get more revenue due to growth of telecom industry, he added.

Assocham also said the current definition of AGR needs to be reviewed and must be referred to the Telecom Regulatory Authority of India (Trai) for its recommendations to make it simple and unambiguous.

It also suggested the new government to implement Trai's guidelines on trading and sharing of spectrum.

Assocham said there is a need to provide impetus to domestic manufacturing by reviewing and rationalising levies on equipment manufacturing, incentivising exports coupled with favourable policy support.

"Refund of excise duty for domestically manufactured mobile handsets, their components, parts and accessories would boost manufacturing, besides focus should also be laid on research and development initiatives to promote innovation in telecom sector," Ramachandran added.

Assocham said all these measures can be implemented in a short timeframe of 30-90 days, which will give the right push to the telecom sector and also have a multiplier effect on other sectors.