TRAI recommendations favour incumbent 2G operators: SSTL

Telecom regulator TRAI's recommendations for the third round of spectrum auction favour incumbent 2G service providers, a top official of SSTL, that offers services under the MTS brand, has alleged.

SSTL CEO Dmitry Shukov also criticised the regulator for not recommending auction of CDMA (800 mhz) spectrum and suggesting a section of it for offering GSM-based services.

The recommendations for the third round of auction have favoured incumbent 2G service providers and are disrespect to MTS' investments, he alleged.

"For TRAI to suggest carving out EGSM (Extended GSM) band from 800 MHz and open it for use for old GSM 2G networks clearly reflects this thinking," he told PTI.

SSTL is an Indian arm of Russian conglomerate Sistema and offers CDMA-based services in nine telecom circles.

Shukov said that the recommendations block future growth of the company both in terms of expanding its operation into other service areas and starting 4G services for which it will need to purchase some more spectrum.

"TRAI should stimulate operators to upgrade their networks to next generation mobile networks like 3G and LTE.

However the recent TRAI recommendations favour the incumbents running 2G networks," he said.

"No roadmap has been presented by TRAI for MTS to acquire additional spectrum within 800 Mhz. This is clearly unfair and discriminatory and goes against the spirit of providing a level playing field to India's only pure play CDMA operator like MTS," he added.

SSTL was the only operator to participate in auction for CDMA spectrum. Following cancellation of its 21 of 22 telecom licences by a Supreme Court order, the company was required to bid for spectrum in service areas where it wanted to continue services. The company chose to bid for eight service areas.

TRAI has now recommended about 37 percent less base price for airwaves for 1800 Mhz with which price for CDMA spectrum was linked.

"With price of 1800 Mhz spectrum reduced by 40 percent, it means SSTL has already paid more than Rs. 1,440 crores, since price of 800Mhz was indexed on 1800 Mhz. This again raises the question of level playing field," Shukov said.

SSTL says that it has invested over USD 3.6 billion in India. Sistema hold about 56 percent stake in the company, Russian government 17 percent and about 24 percent is held by its Indian partner Shyam Teleservices.

"SSTL's investment needs to be respected. Our investors are concerned at the way their investments are being treated in India," Shukov said Shukov said TRAI needs to relook at its recommendations specific to the 800 megahertz band.

"The regulator needs to ensure that none of its recommendations is unfair and discriminatory. Telecom operators investing in new age mobile networks like 3G and LTE need to be encouraged. We would also urge Department of Telecom to look into all such issues," he added.

The telecom regulator on September 9 recommended sharp cuts in reserve prices for the next round of spectrum auctions after previous efforts at selling the airwaves failed.

The government is required to conduct the third round of spectrum auction for 1800 Mhz to comply with a Supreme Court order. The entire spectrum freed from the cancellation of 122 licences in February 2012 in the 2G spectrum allocation case has to be auctioned.

TRAI recommended an about 60 percent cut in the pan-India reserve price for the third round of 2G spectrum (1800 MHz) auctions compared to its previous suggestions.