The Telecom Commission (TC) on Saturday put the onus of deciding the contentious issue of the base price for auction of 1,800 MHz of 2G band spectrum on the Empowered Group of Ministers (EGoM) headed by Finance Minister Pranab Mukherjee.The Telecom Regulatory Authority of India (Trai) had recommended a reserve price of Rs 3,622 crore (Rs 36.22 billion) for one megahertz of spectrum.
In another move, which has brought some cheer to GSM companies, TC decided to ask the regulator to take a re-look at the impact that the reserve price would have on tariffs as well as on the viability of investments made by the telcos.
As part of its recommendations, Trai, under the chairmanship of J S Sarma, had said the impact on the cost of telcos would be minimal at around four to six paisa a minute.
Disagreeing with the view, telcos in a scathing attack on Trai, said the impact will be far larger and jeopardise the industry. They said the impact it could be 26 paisa a minute, going up to 90 paisa in the metros. However, with a new man in charge -- Rahul Khullar --- telcos say it will open a new door for the operators.
After a four-hour long meeting, R Chandrashekhar, chairman of TC and secretary of the Department of Telecommunications (DoT), told the media, "We have taken no view on what level the reserve price for 1,800 Mhz of spectrum should be. We have left it to the EGoM to decide."
"An analysis needs to be made circle-wise on the impact of the reserve price on tariffs if the entire amount is passed on to consumers and viability of the investments made by telecom firms," he added. The analysis would be ready by the end of this month and placed directly before the EGoM.
TC has also asked the regulator to determine whether the pricing arrived at through the auction method should be valid for 10 years, and not 20 years, even though the licence should continue to be given for 20 years.
"Keeping in view the rapid change in technology, Trai's view should be sought on whether for the purpose of pricing a period of ten years is more appropriate than 20