New 2G price plan will cause Rs 6,500-cr loss to Govt: RCom

| Updated on: Feb 11, 2011
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Reliance Communications has joined other telecom rivals in slamming the 2G spectrum pricing proposals mooted by the Telecom Regulatory Authority of India.

It says that the recommendations favour old, private, incumbent GSM operators such as Bharti Airtel, Vodafone and Loop Telecom, as they would now have to pay only for their balance licence periods, which is less than five years for many players, against the regulator's earlier recommendation of a minimum of seven years.

In a statement released on Friday, the Mr Anil Ambani-controlled company said that TRAI's recommendations, if accepted, will create a revenue loss of nearly Rs 6,500 crore to the Government, compared with its earlier recommendations of May 2010.

Steep hike in prices

It may be recalled that TRAI has recommended a steep increase in prices of 2G spectrum, that would also see companies holding more than 6.2 mega hertz spectrum paying a one-time fee for that, a move that would hit older operators on the GSM platform.

TRAI has valued 2G spectrum up to 6.2 MHz at 53 per cent of the 3G auction price. However, it contends that the efficiency of 2G spectrum beyond 6.2 MHz is higher than the start-up spectrum given to 3G operators.

Therefore, the panel has valued spectrum beyond 6.2 MHz at 136 per cent of the 3G auction price.

“With these recommendations, the non level playing field between old and new GSM players will further widen and adversely impact fair competition in the Telecom industry,” the RCom statement said.

‘Poor understanding'

Interestingly, several old telecom operators including the likes of Bharti Airtel and Vodafone Essar have been up in arms against the TRAI proposals, but for different reasons.

In a strongly worded statement released yesterday, Aditya Birla Group company Idea Cellular said that it is dismayed by the continual flip-flops in policy formulation of the telecom sector, “which betray a poor understanding of sector dynamics, as indeed of the immense contribution of the sector to the national well being.”

“In the same breath, the principles of transparency and auction-based spectrum pricing are flouted, whereas arbitrary and unreal administered numbers are sought to be portrayed as ‘market-based',” the statement said.


Published on November 10, 2017

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