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Telecom firms join hands to slam Trai's 'catastrophic' suggestions [India Business] [Times of India]
[May 04, 2012]

Telecom firms join hands to slam Trai's 'catastrophic' suggestions [India Business] [Times of India]


(Times of India Via Acquire Media NewsEdge) NEW DELHI: Burying their differences, telecom company heads on Wednesday made a joint pitch with the government to trash Trai's recommendations, which suggested a 10-fold jump in the reserve price for spectrum auction in addition to tough rural rollout obligations.



Bharti Airtel chairman Sunil Bharti Mittal, AV Birla group chairman Kumar Mangalam Birla, Vodafone's global CEO Vittorio Colao and Telenor's president & CEO Jon Fredrik Baksaas spent the day hopping across ministries, arguing that the government should not accept the "catastrophic" suggestions.

They started the day meeting home minister P Chidambaram, then went to commerce & industry minister Anand Sharma, Planning Commission deputy chairman Montek Singh Ahluwalia, finance minister Pranab Mukherjee and finally to communications minister Kapil Sibal. In between, they stopped in the PMO to meet principal secretary to the PM Pulok Chatterji and telecom secretary R Chandrasekhar.


"This has been the most destructive period of regulatory environment I have seen in 16 years," Mittal said.

Birla, whose telecom company Idea Celluar would be hit too, said, "If the decisions are taken in the interest of the industry, they (Trai recommendations) have to be changed. The current recommendations will kill the industry." Asking the government take the "rightful political initiative", Telenor's Baksaas, who flew in for the meeting, asked the government to put in place a policy that "allows affordability, competition and investments".

Operators have argued that the new norms suggested by the regulator may push up tariffs by 25-30%, something that has been contested by the regulator as well as Chandrasekhar, who have pointed out that there will be a reduction in revenue share too.

Telenor, which will lose 22 telecom licences, has been involved in high-pitched lobbying to get the government to water down the recommendations. It has also approached the Supreme Court against the suggestion to auction only 5 MHz spectrum, saying the move will not help new players have a level-playing field against the likes of Bharti and Vodafone, which have much more radio waves at their disposal. But the fear of having to cough up at least Rs 18,000 crore has probably prompted it to forget its battle with the incumbents and join the offensive against the regulator.

The industry is worried that the government may accept the recommendations else it will be accused of causing loss to the exchequer. The meeting comes a day after the group of ministers met and two days after the Telecom Commission, an inter-ministerial panel of officers, decided to seek clarifications from the regulator on how the pricing formula was reached, apart from other issues.

Sibal remained non-committal on Wednesday. "Telecom operators met me and we had full discussion. They expressed concern regarding Trai recommendations and I said we will certainly look into the matter," he said after the meeting.

While the existing operators would not have bothered too much about the proposed base price of Rs 3,622 crore per megahertz (MHz) for pan-India spectrum, which is around 10 times higher than the price at which former telecom minister A Raja awarded 2G licences and 4.4 MHz spectrum in 2008, the suggestion to shift them to a new frequency band and make them pay the market rate at the time of renewal has jolted them.

The proposed 'refarming' from 900 Mhz to 1800 Mhz will make the operators double their infrastructure, including towers. Besides, the proposed rollout norm, which mandates them to set up separate infrastructure in each village with 2,000-plus population, is expected to cost them a large sum.

(c) 2012 Bennett, Coleman & Company Limited

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