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Our Bureau

New Delhi, July 2 The Economic Survey has suggested major reforms for the telecom sector including auctioning spectrum for mobile services.

It suggested that private players be allowed to access local loop of the state-owned operators for broadband and telecom services in rural areas.

The Survey has suggested allowing spectrum trading between licensed operators but the seller will have to pay a capital gains tax to the Government.

“Auction 3G spectrum. The auctioned spectrum must be freely tradable, with capital gains to be taxed under the Income-Tax Act,” the Survey said.

It has also backed a Department of Telecom proposal to separate licences and spectrum. At present, unified licence is bundled with 4.4 Mhz of start-up spectrum for Rs 1,650 crore. The DoT has proposed to reduce the cost to Rs 45 crore, but operators will not get assured spectrum.

“Disaggregate telecom licences from spectrum allocation. The telecom licence should have a nominal regulatory charge and be based on capability to provide sustained service,” the Survey said.

The Survey has proposed to do away with the existing subscriber-linked spectrum allocation criteria and has suggested an alternate formula for pricing it.

“Spectrum should be auctioned and be freely tradable among companies having a telecom licence. The auction price can be in the form of a fixed price or charge per unit of bandwidth per annum or a combination of the two,” it said.

This recommendation is in line with what the DoT’s spectrum committee has said in its report. However, new players are opposed to auctioning 2G spectrum.

On promoting broadband services, the Survey said, “Allow open access to local loop for broadband provision and designate the cross-country/ rural fibre-optic network as a “public carrier” for provision of telecom connectivity in rural areas. Eliminate revenue share and other telecom charges on provision of broadband connectivity to villages.”

More Stories on : Telecommunications | Economic Survey

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