The Hindu Business Line : Pricing formula likely for additional spectrum

New Delhi, Aug. 22 The subscriber linked spectrum allocation policy may be dumped with the Telecom Regulatory Authority of India (TRAI) likely to suggest putting a cap on the amount of radio waves allocated to cellular operators as part of their licence.

While the TRAI has rejected the idea of putting a freeze on the number of operators in a bid to address the ongoing crunch in spectrum, it is likely to instead suggest that the Government should not allocate more than 6.2 Mhz band per operator in the case of GSM operators and 5 Mhz in the case of CDMA operators.

Pricing Formula

As per the discussions happening within TRAI, operators may be asked to cough up money for any additional spectrum beyond this stipulated bandwidth.

The authority is likely to suggest a pricing formula based on the economic value that the operator derives from the allocated spectrum including factors such as average revenue per user. The TRAI officials said that operators who have already been given more than 6.2 Mhz spectrum will not be asked to surrender the frequency but will be asked to pay a price for the same. Mobile operators such as Bharti Airtel have got up to 10 Mhz spectrum in some of the circles. As per the existing policy, the Government allocates spectrum based on the subscriber base whereby operators can claim up to 15 Mhz spectrum by paying a revenue share.

TRAI may suggest a fixed amount per Mhz spectrum. The final recommendations are expected to be announced within the next few days. While existing GSM operators have expressed concern at pricing additional spectrum, the TRAI’s view is in line with the suggestions made by the CDMA operators and companies wanting to make a foray into the booming Indian cellular segment.

Internal Committee

The Government is also in favour of putting a price on spectrum and has set up an internal committee to review the current frequency allocation policy.