The Hindu Business Line : Cell operators flay Tatas' proposal to price 2G spectrum

The Cellular Operators Association of India (COAI) has termed the proposal from Tata Teleservices (TTSL) to price additional spectrum required for mobile services as ill-conceived, incorrect and harmful. In a letter written to the Communication Minister, Mr Dayanidhi Maran, COAI has countered the Tata proposal by calling it erroneous.

"We fail to understand the need for a new pricing approach when there is already a clear, well defined 2G spectrum allotment policy in place that is based on the "no work-no pay principle" and it is well understood that in telecom, work is the number of subscribers served. We respectfully submit that TTSL's submissions reflect an inadequate understanding of the ground realities of spectrum availability and management and seek only to meet their limited vested interests," said the COAI letter.

The Tatas had proposed that the Government should start charging for additional spectrum allocated to mobile operators. Responding to the COAI letter, a Tata spokesperson said, "the suggestion that 2G spectrum might be priced at half the price of 3G spectrum was based on the fact that unlike in the 3G bands, only very limited quantities of 2G spectrum that were contiguous to existing allocations were available, and these would consequently command a lower premium as compared to 3G spectrum. However, pricing of spectrum would simultaneously yield more efficient usage of unallocated spectrum and deliver valuable revenues to the Government." The Tatas had also suggested that spectrum be given to operators in blocks.

"TTSL has grievously erred in not appreciating that, where adequate spectrum is not available to meet the spectrum needs of operators, how is it being proposed that all un-allotted spectrum should be made available immediately. The proposal is rather naive and simplistic in that it does not take into consideration the fact that there could be more than one claimant for the spectrum nor does it throw any light on how, under such circumstances, these so-called `blocks' of spectrum are to be awarded," said COAI.