Indian Government Under Pressure To Assign 2G Spectrum To Telcos
Indian government is crouching on a valuable store of 2G mobile spectrum, combating with dilemmas about its value and how best to share it out, as pressure develops on the telecom department ahead of a meeting this week to release it to needy operators. The Department of Telecom (DoT) last assigned 2G airwaves in late 2008 and has since maintained it has completely used up spectrum in most regions. But a recent statement admitted on the DoT's website that it has nearly 211 MHz of 2G spectrum for GSM operators and another 75 units for CDMA carriers has caused demands to release it quickly to the industry. Non-availability of spectrum has adversely affected service quality at most operators, hiked up costs for some, and affected network roll-out plans at others. Knowing that the DoT is sitting on such a large amount of spectrum, apart from being a major relief to operators, could also be music to the ears of finance ministry officials struggling to stick to budget targets as economic growth slows down.
The ministry can easily wish to raise around Rs 25,000 crore from a probable sale or auction of 2G spectrum. Calculations by Government under pressure to allocate 2G spectrum to telcos - The Economic Timesshow that the government can raise at least Rs 18,903.52 crore by selling airwaves to GSM operators at the lower of the two 'administrative' price bands proposed by the Telecom Regulatory Authority of India (TRAI), and another Rs 5,911.28 crore from CDMA operators. The amount could be 160% higher if the spectrum is given out at the upper band proposed by the regulator previously this year. An auction of the spectrum, an acticity favoured by some large operators and likely to find favour with the government, could fetch the national treasury an even higher number as needy operators try and outbid each other to access the resource. A DoT official stated that the Telecom Commission, the top decision-making body of the communications ministry, will meet on Friday to examine the issue and to discuss whether 2G airwaves can be distributed at prices recommended by Trai.
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The ministry can easily wish to raise around Rs 25,000 crore from a probable sale or auction of 2G spectrum. Calculations by Government under pressure to allocate 2G spectrum to telcos - The Economic Timesshow that the government can raise at least Rs 18,903.52 crore by selling airwaves to GSM operators at the lower of the two 'administrative' price bands proposed by the Telecom Regulatory Authority of India (TRAI), and another Rs 5,911.28 crore from CDMA operators. The amount could be 160% higher if the spectrum is given out at the upper band proposed by the regulator previously this year. An auction of the spectrum, an acticity favoured by some large operators and likely to find favour with the government, could fetch the national treasury an even higher number as needy operators try and outbid each other to access the resource. A DoT official stated that the Telecom Commission, the top decision-making body of the communications ministry, will meet on Friday to examine the issue and to discuss whether 2G airwaves can be distributed at prices recommended by Trai.
This topic has been on the agenda of several Telecom Commission meetings in the past, but the glimpse of the 2G scam and arrest of former telecom minister A Raja and former telecom secretary Siddhartha Behura for handing out spectrum too cheaply have meant little action in the matter. An executive with Bharti Airtel , the country's top mobile operator said, "Large operators are in critical need of 2G airwaves. The ongoing controversies have resulted in all allocations being put on hold. Everyone is a loser here - government has lost revenues and operators and consumers are suffering." Mobile operators, whose top executives are enthusiastically tracking Friday's meeting, say the non-availability of spectrum has been lame for the industry, which needs it to meet quality of service standards and to support their expanding customer base.
The mobile industry has gained more than 425 million customers, almost all of them on the 2G platform, in the last three years throughout which the DoT had frozen fresh assignments of this spectrum. New mobile operator Uninor, the joint venture between India's Unitech and Norway's Telenor, said the government's failure to award the company 2G airwaves in many regions had impacted its plans.
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