Connecting BSNL Employees / Subscribers 4 Growth of BSNL: COAI slams Trai proposal on 2G pricing

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COAI slams Trai proposal on 2G pricing

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NEW DELHI: The industry lobby representing GSM operators such as Bharti Airtel, Vodafone, Idea Cellular and BSNL on Wednesday alleged that the sector regulator's latest recommendations on spectrum pricing would destroy level-playing field in the industry as they favored dual technology players like Tata Teleservices and Reliance Communications.

This comes within days of industry lobbies representing both GSM and dual tech players jointly slamming Trai and terming the regulator's proposals as 'arbitrary, regressive and inconsistent.' 

The Cellular Operators Association of India (COAI) said it was surprised that the regulator was consistently overlooking 'illegalities' being committed by the likes of Tatas and RCom, that were given GSM spectrum between September 2007 and March 2008 by jailed telecoms minister A Raja without any additional licence, and against policy norms existing at that time. 

It added that this GSM spectrum should have been included in the total spectrum that will be available for auction since the Supreme Court had observed that all allocations made in that period were 'arbitrary' amounting to being illegal. 

The COAI has argued that Trai was attempting to 'further legalize' dual tech companies by recommending that they be given an additional 1.25 MHz GSM spectrum. 

Earlier this week, Trai recommended a 13-fold increase in the spectrum price by proposing that mobile phone companies pay a minimum of 3,622.18 crore for every unit of 2G spectrum. It is estimated that a telco will require about 5 units of 2G airwaves to offer mobile services implying a new entrant will have to pay a minimum of 18,111 crore to get a new pan-India permit. 

"While the new operators will now have to pay over 18,000 crore for the GSM spectrum, the dual spectrum players will continue to hold the same GSM spectrum at a ten times lower price (of 1,650 crore) despite the fact that both were granted the spectrum pursuant to the same decision making process of DoT between the period September 2007 to March 2008," the COAI added. 

It also reiterated its earlier allegation that CDMA players were offering 3G services on frequencies that had been allotted to these companies for second generation services and added that this had caused a loss of 51,977 crores to the exchequer. 

It also said that dual technology players did not pay spectrum usage charge, a revenue share levy that increases based on the quantum of airwaves a company hold, on the combined frequencies they held. It added that paying separate spectrum usage charge for their GSM and CDMA airwaves may cost the around 25-30,000 crore over the 20 year license period. 

Trai, in its recommendations, had also said that the 900 MHz band, considered the most cost effective for second generation services, and currently used Bharti, BSNL and Vodafone along with Idea and Aircel in some circles, be redistributed or refarmed amongst all operators. 

But the COAI has argued that licenses have been technology neutral since 1999 when the mobile operators were released from being mandated to use only GSM technology and could use any other technology in their allocated spectrum.

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