A committee set up by the Department of Telecom to examine the recommendations made by the telecom regulator on spectrum pricing and allocation has rejected or sought review of key proposals. In a 38-page report the panel has proposed to seek a review of the TRAI recommendations including the one giving first priority to operators who already have start-up spectrum.

While the panel has agreed to TRAI's suggestion to charge a one-time fee from operators with more than 6.2 Mhz spectrum, it has stated that the calculations used by the regulator to arrive at the charges were based on assumptions and contradicting. TRAI has suggested that GSM players with more than 6.2 Mhz spectrum should pay Rs 1,769 crore per Mhz pan India. The DoT panel noted that TRAI has made several assumptions while arriving at the pricing and therefore may reconsider. The panel has also sought similar pricing done for CDMA operators with excess spectrum. On the issue of date of implementation, the panel has suggested that TRAI may recommend per Mhz price every year by December 31, which shall be valid for the next financial year.

The panel has also rejected TRAI's suggestion to change the roll out obligation rules on grounds that most of the operators have already completed the current obligations and therefore it would be legally untenable to change the norms. TRAI had suggested roll out 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.

TRAI had also suggested that all telecom operators be brought under a unified licence regime with a uniform licence fee, which will be brought to 6 per cent of the operator's revenues over a four-year period. The DoT panel has, however, pegged this at 8.5 per cent in order to protect Government income.

On the issue of allocation, TRAI had said that operators who have already been given start-up spectrum should be given additional spectrum first and the operators who are yet to get start up spectrum should be the last in the queue in terms of priority. However the DoT panel has suggested the opposite with priority given to operators who have not received any spectrum till now. This assumes significance because if the TRAI view is accepted then Reliance Communications stands to gain but if the DoT panel's views are taken on board then Tata Teleservices and some of the new GSM players would be the first to get spectrum.

The panel has, however, agreed to most of the TRAI suggestions on Mergers & Acquisitions. TRAI had suggested that M&A will be allowed only if the merged entity's market share is not greater than 30 per cent of the total subscriber base. No M&A activity will be permitted if the number of operators in a circle falls below six.

The panel's views along with the TRAI proposals have been sent to the Telecom Commission to take a final view on the issues. Then the entire policy will be sent to the Cabinet for ratification.

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