Trai Chairman Calls Telcos Stand on Spectrum Auction 'Paradoxical'

Calling telecom operators' objection regarding auction of premium spectrum 'paradoxical', Trai Chairman R S Sharma on Tuesday questioned their stand as they'd earlier blamed the government for the airwave crunch and the resulting poor service quality.

"The same people who were saying they are unable to provide quality service because spectrum is not available, the same people are saying don't auction the spectrum. This is some kind of paradoxical situation. Nevertheless, we will take into account every views of all stakeholders," Sharma told reporters on Tuesday.

He was speaking on the sidelines of a launch event of a feature phone, the Lava KKT Ultra+ Union, which supports 22 Indian languages.

An inter-ministerial panel Telecom Commission on Monday decided to seek clarification from the Telecom Regulatory Authority of India on mega-spectrum auction plan worth Rs. 5,36,000 crores suggested by it.

Of the Rs. 5,36,000 crores windfall, 700MHz spectrum could alone contribute over Rs. 4,00,000 crores if all frequencies are sold at pan-India base price of Rs. 11,485 crores per MHz - which is the highest price for any telecom radiowave.

Leading operators have requested the regulator and the government to defer the sale of 700MHz spectrum, saying that ecosystem for providing services in this band was not developed and sale would lead to under-utilisation of the spectrum for several years and block industry's crucial funds.

The DoT committee has found that in some telecom circles, including UP East, UP West and Bihar, Trai recommended around 40 percent lower price for 700MHz band than 900MHz band.

Spectrum is priced on the basis of its efficiency to carry mobile signals and ecosystem of device and equipment available for its usage. The lower the frequency band, the higher is its efficiency to carry long distance signals.

The cost of delivering mobile services in 700MHz band is approximately 70 percent lower than 2100MHz band, which is widely used for 3G services.

Trai used a formula recommended by it in April 2012 to calculate price of 700MHz band spectrum. The regulator had then suggested to set the price of 700MHz band at four times of 1800MHz band that was earlier used for 2G services and now fit to be used for 4G services as well.

Telecom Commission is also learnt to have discussed possibility of staggered auction of spectrum in 700MHz after taking in to account of representation made by industry. The government expects a revenue of Rs. 98,995 crores from communication services in 2016-17, which includes proceeds from spectrum auction and other fees levied by DoT.

At the event, Sharma appreciated move of Lava to launch a phone for economical segment that supports local language.

"Mobile phone providers, equipment providers have big role to play. They can provide content in local language to make Digital India a success. People who know English is very less. It may have increased with increase in literacy but still I feel it's low. This is a stone laid for bridging digital divide. I expect others also to join this caravan," he said.

Lava launched a dual-SIM enabled KKT Ultra feature phone at Rs. 1,500, and said that all its phones that will be launched in future will have support for local languages.

"The government faced challenges in broadcasting any SMS. Many people are able to understand their local language. There is a need to work on availability of technology in Indian languages. If people can get SMS in their local languages, they will prefer to use feature phone," Ajay Kumar, Additional Secretary at Department of Electronics and IT said.

Lava International Chairman and Managing Director Hari Om Rai said that mobile phone is a device that works in all space like banking, e-commerce etc.

"I feel that $250 billion (roughly Rs. 16,58,580 crores) worth manufacturing activity can take place and generate employment for over 2 crores people in next 10 years. Lava will invest Rs. 2,600 crores in manufacturing of mobile devices in next 7-8 years and generate employment for about 50,000 people," Rai said.