The Hindu Business Line : DoT seeks operators’ views on spectrum allocation, pricing

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DoT seeks operators’ views on spectrum allocation, pricing

Thomas K. Thomas

New Delhi, Sept. 18 With the GSM-based operators issuing a legal notice to the Government expressing their concern over spectrum allocation, the Department of Telecom has thrown the ball back into the operator’s court by asking them to suggest a mechanism whereby, spectrum can be priced and allocated according to the demand.

DoT’s internal committee, set up for drafting policy for spectrum valuation and pricing, has issued a questionnaire to all the operators seeking response on how best the Government should value spectrum, considering numerous variables such as the spectrum bands involved, technology deployed, investments required, types of services offered and demanded and level of competition.

The move assumes significance in the light of the concerns expressed by GSM players that the Government and the telecom regulator were not taking into account the interest of existing players while deciding spectrum allocation policy.

TRAI recommendations

In its recent recommendations, the telecom regulator had suggested that spectrum be priced beyond 10 Mhz and that operators be asked to pack in more subscribers for being eligible for additional radio frequency.

TRAI had also suggested that the Government should allow new players to enter the market.

The existing GSM operators have expressed concern at these recommendations and have claimed first right to the available spectrum before new operators are considered. They have also pitched in to continue with the existing subscriber-based spectrum allocation policy.

On the other hand, companies which have applied for new licences, want the spectrum to be allocated on a first-come first-serve basis and support the TRAI suggestions. With the industry divided on the issue, DoT’s move to start consultation with the operators before taking the final decision is being seen as a move to address legal concerns which may arise in case any operator drags the Government to court.

The department has, therefore, asked the operators whether spectrum should be priced based on revenue-sharing, auction, or a combination of two or more of these approaches.

It has also asked whether the pricing be different for metro, urban and rural areas, taking into account the levels of current and potential usage.

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