Dashing mobile operators' hopes of a relief, the Telecom Regulatory Authority of India (TRAI) on Thursday stuck to its stand of imposing a higher price for 2G spectrum. The regulator has also insisted that rollout obligation should be based on habitation instead of the existing norm that is based on geographical coverage.

TRAI has, however, suggested relaxing the merger and acquisition (M&A) norms to enable consolidation in the sector. It has also withdrawn its recommendation on introducing a slab system for pricing air waves, whereby operators owning over 8 Mhz would had to pay 1.3 times more money than those with less than that. TRAI has instead suggested that a uniform one-time fee be charged from all operators that have more than 6.2 Mhz.

Uniform fee

In another breather for the operators, TRAI has supported their demand of moving to a uniform annual revenue share of 6 per cent, instead of 8.5 per cent suggested by the Department of Telecom (DoT).

The regulator said that the objective of moving to a uniform fee for all operators was to make the regime simpler and easy to implement and not to raise revenues for the Government.

“The total revenue impact due to the licence fee changes would be a surplus of Rs 369.92 crore for the four years 2010-11 to 2013-14. The Authority is satisfied that the revenues of the Government would not be adversely affected on account of the uniform licence fee of 6 per cent,” the regulator said.

But on other key issues, including spectrum refarming and licence renewal charges, the regulator has stuck to its earlier views. TRAI, in May 2010, had given its recommendations on all these issues, wherein it suggested imposing a one-time fee of Rs 4,571 crore on all operators who own more than 6.2 Mhz.

The proposal was met with protest from incumbent mobile operators on grounds that additional spectrum was issued by the DoT from time to time on subscriber-linked criteria and it was unfair to change the rules with retrospective affect.

The DoT had then asked TRAI to review the proposal and explain why the fee should be charged only from those with more than 6.2 Mhz spectrum. In its response, TRAI has reiterated that the price, calculated by a panel of experts, is the best possible way to put a value to the airwaves. If the DoT accepts this recommendation, then it will mean a huge payout for the operators, especially when they go for licence renewal.

Telecom companies, including Bharti Airtel's licences, are up for renewal starting 2013-14 and going by TRAI's pricing scheme they would end up coughing up over Rs 20,000 crore each for pan-India operations.

The change in rollout norms will also hurt telcos. Despite DoT's objections, TRAI has suggested rollout obligation based on population, whereby operators would be required to cover all areas with more than 10,000 people within two years and 2,000-5,000 people in four years.

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