M A I N   N E W S

Mobile tariffs may rise
Govt move to allow market to drive 2G Spectrum price might result in firms hiking charges
Tribune News Service/PTI

New Delhi, January 29
In a major shift in policy that may make mobile telecom services costly, Telecom Minister Kapil Sibal today said henceforth all operators would have to pay market price for initial as well additional spectrum.

Delinking Spectrum from the licences in the aftermath of the 2G scam, Sibal said, “In future, the Spectrum will not be bundled with the licence. The licence to be issued to telecom operators will be in the nature of Unified Licence and the licence holder will be free to offer any of the multifarious telecom services.”

He added: “In the event, the licence holder would like to offer wireless services, it will have to obtain Spectrum through a market driven process.”

As of now telecom operators were getting spectrum bundled with the telecom licenses which had paved the way for low tariff regime and intense price war among the service providers.

But now, new operators, if their licences are held valid, would have to pay a market price for the additional 1.8 Mhz of 2G spectrum and this may make their operations financially unviable.

The changes would be implemented with immediate effect, the minister said. The announcement from Sibal comes within days of telecom sector regulator Telecom Regulatory Authority of India (TRAI), saying that it would soon submit fresh recommendations on the issue.

In May last year, TRAI had floated the proposal for linking 2G spectrum prices with 3G radio wave rates. The proposal came after the auction for third-generation (3G) spectrum raked in over Rs 67,000 crore for the government.

Sibal added the measures would be part of the New Telecom Policy, 2011, being formulated by the Department of Telecom (DoT).

Earlier, the cut-off for charging for spectrum was 4.2 MHz.

Further details of charging will be fixed after TRAI submits its report on the matter to the DoT. The charges will be retrospective from 2008, to three calendar years henceforth.

“We’ve reached a stage where the objectives of the existing policy have been well-served. Every circle has 12-14 competitors. Tele-density has reached almost 62 per cent. Now the broad contours of the policy needs a directional shift,” Sibal said.

“It also is necessary to ensure a level-playing field for all players. Any new policy on pricing would need to be applied equally to all players,” said the minister, ruling out first-cum-first served basis for award of spectrum in future.

The present telecom policy is being formulated on Department of Telecom’s recommendation to the ministry which was based on the three basic guiding principles namely reasonable revenue for the government, affordable services for users and robust growth of the sector.