The Spectrum Tussle - Cdma V Gsm

[srk006 21]

Idea responds

'TRAI recommendations convey impressions of crony capitalism'

Telecom operator Idea Cellular on Thursday criticised the recommendations of TRAI on 2G spectrum pricing and allocation, saying it bore "impressions of crony capitalism".

"For too long, the telecom sector policy has variously displayed characteristics of quota raj, licence permit raj and an SSI mindset, conveying unfortunately impressions of crony capitalism," Idea Cellular said in a statement.

TRAI, on Tuesday, suggested that operators should pay an additional one-time fee for holding spectrum beyond 6.2 Mhz.

If implemented, this will be a big blow to GSM players like Idea Cellular, Bharti Airtel and Vodafone Essar that have well over 6.2 Mhz of spectrum and will have to cough up more to retain the additional radio waves.

Idea Cellular said that the TRAI recommendations do not advance the objectives of achieving spectrum efficiency or moving towards a market-based pricing mechanism.

"The sector and the nation deserve a new deal. We expect the government to seize the moment," Idea Cellular said.

Source

[kesav 127]

As expected, other than cartel (Airtel,Vodafone and Idea) all other operators welcome TRAI's recommendations.

AUSPI Welcomes TRAI’s 2G Spectrum Recommendations

CDMA operators Reliance communications (Rcom), Tata Teleservices (TTSL) and MTS India (SSTL) lead Association of Unified Telecom Service Providers of India (AUSPI) welcomes Telecom Regulatory Authority of India (TRAI)’s recommendation to charge incumbents telecom operators a one time fee for holding 2G spectrum.

“TRAI’s recommendations is well balanced, progressive and transparent unlike past instances of spectrum allocations well over legal entitlement to incumbent GSM operators.” said AUSPI.

According to AUSPI “The TRAI recommendations are pro-consumer and will help bridge digital divide by linking spectrum allocation with roll-out obligations.While no Association or operator has got all issues from their wish-list accepted by TRAI, TRAI has accepted far more of the wish-list of incumbent GSM operators that AUSPI members.”

AUSPI also said that incumbent GSM operators had welcomed DoT’s Second Spectrum Committee Report. TRAI recommendations are very much similar but as these are now closer to implementation, they are being attacked by the very same operators who had earlier welcomed very similar recommendations.

source :: http://telecomtalk.info/auspi-welcomes-trai-s-2g-spectrum-recommendations/27839/

Etisalat welcomes TRAI’s new recommendations

New entrant Etisialt has welcomed regulator TRAI’s new recommendations on spectrum allocation and pricing terming them as pro-consumer, ensuring level playing field and also helping the government increase revenues.

The operator said that the recommendations were a correct policy initiative and fully in accordance with the government policies to bring about more competition. The recommendations will ensure that service providers deploy latest spectral efficient technologies.

It also welcomed the regulator’s push for re-farming of 900 MHz band.

“However, in-spite of progressive recommendations aimed to reduce the inequities as also to increase the government revenue; some of the recommendations will increase cost and may face implementation challenges e.g. to achieve the coverage through rural rollout in next one year, that may increase the costs, M&As and spectrum sharing,” said the company.

source :: http://www.telecomtiger.com/PolicyNRegulation_fullstory.aspx?passfrom=PolicyNRegulation&storyid=9137&section=S174

[kesav 127]

TRAI gives Rs 6,440 cr bonanza on lower annual licence fee

Telecom regulator TRAI on Monday said mobile operators would be paying only Rs 8,125 crore towards excess spectrum charges, as they would be saving over Rs 6,440 crore on account of lower annual licence fees.

While giving its recommendations on spectrum management and other issues, TRAI had also lowered the annual licence fee to six per cent across the nation, which would result in savings of Rs 6,442 crore for all the players.

In the case of Bharti Airtel, the lower licence fee would result in savings of Rs 1,996 crore, while for Vodafone, it would be Rs 1,387 crore.

TRAI had proposed that the licence fee paid by operators should be reduced in the next four years to an uniform 6 per cent of adjusted gross revenue from the current 6-10 per cent.

At present, telcos are charged a licence fee of 10 per cent in the metros and A circles, 8 per cent in B circles and 6 per cent in C circles.

For radiowaves beyond the contracted 6.2 Mhz in their possession, the Telecom Regulatory Authority of India (TRAI) last week recommended that operators pay a one-time fee based on prices of 3G spectrum, the auction for which is currently on.

Bharti, Vodafone Essar, MTNL and BSNL hold over 6.2 Mhz of spectrum in many of the circles. Bharti and Vodafone hold more than 10 MHz in many circles, including Mumbai and New Delhi.

Telecom stocks were battered on stock markets following the TRAI proposals in anticipation of operators' balance sheets being hit by huge payouts.

As per TRAI's proposals, for spectrum between 6.2 Mhz and 8 Mhz, operators have to pay one-time fee discovered by the 3G auction. For spectrum between 8 Mhz and 10 Mhz, the fee would be 1.3 times the 3G price.

All TRAI proposals need to be approved by the Department of Telecom to be made law.

source:: http://www.hindustantimes.com/TRAI-gives-Rs-6-440-cr-bonanza-on-lower-annual-licence-fee/Article1-544930.aspx

By reading through the above article and the recommendations carefully everyone will realize these recommendations are the best in many ways.

The amount which incumbents going to pay as one-time charges is very very minute when compared to the amount they're pouring into the 3G auction.

I want to understand what is that special brain made up of which thinks that company will collapse if they pay one-time very minute amount for 2G but thinks it's healthy to pour acrimonious amount of money into 3G spectrum.

I request DoT to accept the recommendations as quickly as possible and in totality.

Edited May 18, 2010 by kesav

[kesav 127]

TRAI had shoot a letter to DoT yesterday mentioning the following details

1) Requesting DoT not to make any unilateral decision without referring back the doubts/queries on recommendations to TRAI as per TRAI Act.

2) TRAI has mentioned that regarding the 'current price' of 2G spectrum, TRAI will initiate a wider consultation and apprise DoT on the final values

3) TRAI has mentioned that it will do wider consulation on refarming of 800/900 MHz spectrum and provide the recommendations to DoT

4) TRAI has requested DoT to wait till the above 2 recommendations are submitted to DoT for to make any decision on the topics of 'current price' and 'Refarming'

source :: http://www.trai.gov.in/WriteReadData/trai/upload/misc/143/lettertoSecDot19may10.pdf

A welcome move by TRAI.

[kesav 127]

TRAI rules out backtracking on 2G price decision

There is no question of retracing or revising the stance on 2G spectrum, sources in the Telecom Regulatory Authority of India (TRAI) told CNBC-TV18.

The regulator was reacting to a news report that the Department of Telecommunications (DoT) had rejected its proposals and asked it to redo the 2G re-pricing exercise separately.

Telecom companies working on the GSM platform have been up in arms against the TRAI's 12 May recommendations on capping of spectrum in circles, cost for buying additional spectrum, and mergers and acquisitions.

Bharti Airtel has charged TRAI tailoring the recommendations to benefit select operators. Vodafone echoed those views, and added that the one-time spectrum fee could put the industry in jeopardy.

However, those working on the CDMA platform, like Reliance Communications and Etisalat DB, have welcomed the move. (See: DoT may reject TRAI move to link 2G, 3G prices: report)

Yesterday, TRAI chairman J S Sarma asked the DoT to consult TRAI before making any changes to its recommendations. The telecom regulator had written to DoT on 18 May seeking wholesome implementation of its report.

TRAI has also told the telecom ministry that two key recommendations that have attracted a lot of criticism from many phone firms are still "works in progress", and suggested that the government wait for the finished article before taking any decision, according to an Economic Times report.

In a letter to telecom secretary P J Thomas, yesterday, Sarma emphasised that the recommendation linking the price of 2G wireless spectrum to 3G makes clear that it is only an interim suggestion and a separate exercise is being initiated to further study the subject.

India's top mobile phone operators on the GSM technology platform have torn into TRAI for trying to link the price of 2G spectrum with 3G.

They say the recommendation asking them to pay a one-time fee for 2G spectrum over 6.2 MHz at rates determined for 3G during the ongoing auction is discriminatory and could harm a sector already struggling to cope with an intense tariff war.

Vodafone, which has accused TRAI of seeking to overcharge established players and raising barriers to consolidation, said on Tuesday that it is taking a $3.2-billion (Rs14,600 crore) charge on its Indian arm Vodafone Essar because of the price war and the regulator's recommendations on 2G spectrum fees.

''I don't think these rules (on consolidation and spectrum) make sense. What India needs is investment and good technology and this will not come in an environment with too many operators and fragmentation of investment,'' Vodafone Group chief executive officer Vittorio Colao said in London while announcing the company's results for the financial year that ended in March.

In the letter, the telecom regulator has told the government that it must be consulted if any changes are sought to be made to its recommendations on rewriting rules governing wireless spectrum and licensing for mobile phone operators. Under the TRAI Act, the government has to consult the regulator if its recommendations are changed.

source:: http://www.domain-b.com/links/regulatory_agencies/trai/20100519_2g_price_decision.html

TRAI slams Cartel (Airtel, Vodafone and Idea) that the skeleton of the framework will not be touched only the parameters may be modified as per the upcoming 2 recommendations.

It's unhealthy for the Regulator to budge under pressure from just 3 operators when rest of the telecom industry welcomes the move.

Regulator should and must hold firm against this paid media campaign by big 3 economic thugs who never in past made any single pro-consumer move. They will never ever do.

Regulators throughout the world will always come under vicious pressure created by looters in the domain whenever they make pro-consumer and pro-competitive move. The best Regulator is the one who withstands that.

TRAI has always proved in the past that they can never be pressured and they will prove again this time too. TRAI is the benchmark regulator for any Indian regulatory body(for IRDA,SEBI and so on). In many cases, TRAI has been a benchmark for even global regulators. We pray as Indian citizens that this sanctity achieved by the fearlessness of those who headed TRAI in the past is not diluted even 1%.

[kesav 127]

When Cartel(Airtel, Vodafone & Idea) can throw in 16,534.31 crore for 3G (as on 18-05-2010, Pan-India license cost).

why can't they pay just Rs 1,184 crore(Airtel), Rs 1,462 crore(Vodafone),Rs 1,066 crore(Idea) as one-time charge for 2G for following reasons.(net hit value as per TRAI)

1) Their advantageous position of holding on to excess 2G spectrum beyond cap (8 MHz for non-metro and 10MHz for Metro circles)till next 6 months ?

2) Their advantageous position of using 900 MHz against others in 1800 MHz ? ( TRAI should have refarmed the 900 MHz immediately and thrown the incumbents into 1800 Mhz instead showing undue sympathy(waiting till license renewal) for these looters)

3) Their advantageous position of having to pay for only 3 years in retrospect for the spectrum held beyond 6.2 MHz till date(although for some operators these spectrum have been provided 10 yrs ago) ?

To put it simply, how can they explain to their shareholders in their AGM what business case they had in their mind when they were pouring in 16 times more money than what they had worried and cried for.........

I feel this is vicious move on the part of big thugs to cause flurry in the secondary market to put government under pressure.

Secondary market is not a concern for them after all.

Edited May 19, 2010 by kesav

[kesav 127]

2G spectrum pricing consultation to end mid-July

NEW DELHI: The chairman of TRAI, JS Sarma, said on Thursday that consultation on additional payments for the 2G spectrum would end by July 15.

The telecoms regulator last week recommended operators pay a one-time fee for holding 2G radio-spectrum beyond 6.2 mega hertz (MHz) based on 3G prices, a move that will hit established firms that are dominant on the GSM platform.

India is the world's fastest growing mobile phone market with some 500 million subscribers and is adding roughly 16 million new users a month.

source:: http://economictimes.indiatimes.com/news/news-by-industry/telecom/2G-spectrum-pricing-consultation-to-end-mid-July/articleshow/5953683.cms

[kesav 127]

AUSPI Media Release: Unprecedented and virulent attack by incumbent

GSM operators on an Independent Regulator is an attempt to browbeat

Government to accept the few remaining issues from their wish-list that

TRAI has not accepted

· AUSPI terms recommendations as well balanced, progressive and transparent unlike

past instances of spectrum allocations well over legal entitlement to incumbent GSM

operators.

· AUSPI says recommendations are pro-consumer and will help bridge digital divide by

linking spectrum allocation with roll-out obligations.

· AUSPI says that while no Association or operator has got all issues from their wish-list

accepted by TRAI, TRAI has accepted far more of the wish-list of incumbent GSM

operators than AUSPI members.

· Yet, vicious and unprecedented attack continues – this has never happened in the sector

before and against an independent regulator in any sector, anywhere in the world.

· AUSPI terms vicious attack by incumbent GSM operators an attempt to force the

Government and Authority to give in on the few remaining issues from their wish-list

that TRAI has not accepted.

· Browbeating Government in line with past behavior of incumbent GSM operators, who

have received huge largesse in the past – without any additional charges and without

any checks.

· AUSPI gives examples of previous gifts from Government to incumbent GSM operators –

change of licencing regime to revenue share, doubling of licence period at no additional

charge, allocation up to massive excess spectrum of 10 MHz in a totally non-transparent

manner and with no additional charges, frequent reduction in licence fees etc.

. AUSPI says, an attempt to stop the continuing largesse to incumbent GSM operators is the

reason for the virulent attack.

· AUSPI shows how TRAI recommendations are nearly totally in line with incumbent

GSM operators’ wish-list – dropping of subscriber linked criteria (SLC) for additional

spectrum, accepting of spectrum sharing, delinking of spectrum from licence, levying

merger charges, no re-farming of 900 MHz immediately, increasing spectrum limit for

GSM operators etc.

· TRAI has rejected far more of AUSPI and its members wish-list – 20 year validity for

dual technology, no licence fee on ISP and IP-1, no perpetuity of licence, no definite 3G

forward path for CDMA, practically no increase in spectrum limits for CDMA etc.

· Despite this, AUSPI says that, while it has expressed its disappointment in some areas

where it believes TRAI has been unfair, it has broadly supported the TRAI and

understands the Authority has to take a balanced view of various stakeholder needs for

the good of the sector and of consumers.

· AUSPI says that incumbent GSM operators had welcomed DoT’s Second Spectrum

Committee Report. TRAI recommendations are very much similar but as these are now

closer to implementation, they are being attacked by the very same operators who had

earlier welcomed very similar recommendations.

· AUSPI hopes TRAI and the Government will not buckle to this vicious and virulent

blackmail and will continue to maintain independence.

· One of AUSPI’s Member i.e., Tata TeleServices suggests that:

Dual technology operators who are existing operators is a separate category and

DoT action of placing Tata Tele after new UAS licensees is in-appropriate .Tata

Tele which paid dual tech fee before 30 months has received partial spectrum in

9 circles and is yet to receive in Delhi and AUSPI requests that the order of

priorities suggested by TRAI need a correction in as much as first priority should

be given to Tata Tele as regards initial spectrum.

As there is no 2G spectrum available and as it has been made available without

paying market price, the spectrum above the permissible limits needs to be

withdrawn and in case of mergers spectrum above the permissible level should

not be allowed to be retained as it would encourage hoarding of spectrum.

S. C. KHANNA

SECRETARY GENERAL

source:: http://auspi.in/news/AUSPI_Press-Release_18may10.pdf

[kesav 127]

DoT appoints internal panel to review TRAI recommendations

With some of the operators crying foul over the new 2G recommendations announced last week, the DoT has formed a committee to examine the recommendations of regulator TRAI on spectrum management and licensing framework.

Mr M P Tangirala, DDG (Licensing Finance) is a member of the committee. DoT officials Ms Shahnawaz Alam, Mr Sanay Kumar, Mr Sanjeevan Sinha are part of the five-member committee.

The panel is expected to submit the report in the next seven days.

source:: http://telecomtiger.com/PolicyNRegulation_fullstory.aspx?storyid=9200&section=S174

[kesav 127]

TDSAT declines interim relief to operators over CAG audit move

The country’s telecom tribunal, TDSAT has declined an interim relief to incumbent operators, who had demanded an interim relief to be provided over the CAG’s move to conduct fresh audit of such operators accounting books through independent auditors.

The CAG has asked for independent audits of companies, Bharti Airtel, Vodafone, Tata Teleservices and BSNL.

The government has already conducted independent audits of these operators. The independent audits were necessitated after it was observed that some operators were manipulating revenues to benefit out of the licence fee payments resulting in loss to government exchequer.

The TDSAT said, "The power of CAG is an independent one flowing from a statutory rule and not out of a contract qua contract."

As per the TRAI Act, 2002, the accounts of private operators can be audited by CAG and the same was also incorporated in the licences of these players.

source:: http://telecomtiger.com/PolicyNRegulation_fullstory.aspx?storyid=9198&section=S174

[kesav 127]

FICCI delegation meets TRAI Chairman

Industry association, FICCI led a delegation of telecom industry players as well as ISPs for a meet with TRAI Chairman, Dr. J S Sarma and officials of TRAI.

The meeting was sought by FICCI specifically to discuss TRAI recommendations on Spectrum Management and Licensing Framework released last week. TRAI recommendations have far reaching impact on many of the licenses including UASL, CMTS and ISP.

source :: http://www.telecomtiger.com/PolicyNRegulation_fullstory.aspx?passfrom=PolicyNRegulation&storyid=9201&section=S174

[kesav 127]

CMAI supports TRAI’s 2G recommendations

CMAI, an association that promotes the Indian telecom and IT industries, has supported the Telecom Regulatory Authory of India’s (TRAI's) latest recommendations on 2G spectrum. This seems to go against Airtel and Vodafone, who have opposed the recommendations and called it a retrograde step.

Speaking at an awards function, CMAI President NK Goyal said, "We welcome the TRAI's new 2G recommendation."

Recently, TRAI had recommended that companies pay a one-time fee for holding 2G radio-spectrum beyond 6.2 MHz based on 3G prices. The regulator had also recommended that the spectrum assigned beyond the contracted amount be paid for at the current 3G price.

The recommendations had invited criticism from many telecom operators in the country, following which Telecom Minister A Raja promised that the government will listen to all mobile operators before finalising any increase in 2G spectrum fee.

The Association of Unified Telecom Service Providers of India (AUSPI) has already supported the recommendations. Tata and Reliance Communications have also stated support of the recommendations and now Videocon chairman Venugopal Dhoot too has supported the move by the regulator.

However, finding it difficult to push through its recommendations, TRAI has said it will hold consultations with telecom operators in the country about the 2G pricing recommendation. TRAI chairman, J S Sarma said while interacting with the press at an event here today, that the consultations will be completed by July 15.

source :: http://telecomyatra.afaqs.com/news/?sid=918_CMAI+supports+TRAI%E2%80%99s+2G+recommendations

[kesav 127]

Cartel goes to TDSAT

Incumbent GSM operators Bharti Airtel, Vodafone Essar and Idea Cellular have filed a petition with the Telecom Dispute Settlement Appellate Tribunal (TDSAT) challenging the telecom regulator's proposals on 2G spectrum.

The Tribunal has scheduled to hear the case on Tuesday.

The move from the GSM players was expected since the three operators would be the hardest hit if the recommendations of the Telecom Regulatory Authority of India (TRAI) are accepted by the Government.

The regulator has suggested all operators with more than 6.2 Mhz spectrum should be asked to pay a fee which is linked on a pro-rata basis to the recently concluded 3G auction. Since the three operators own as much as 8Mhz and 10 Mhz in some of the circles the pay out would be Rs 20,000 crore.

In addition, the regulator has also suggested that the operators should be asked to pay a renewal fee if they want to continue to offer services at the end of the licence period, that is 20 years. Bharti and Vodafone had taken some of their licences in 1994-95 which means that they would have to pay a hefty amount in the next 4 years.

Bharti, Idea Cellular and Vodafone had earlier written to the Ministry of Communication urging the Government to dump the TRAI proposals. They said that the TRAI proposals would put a huge financial burden which in turn will impact their business viability. Though the TRAI itself has told the Government to hold any decision till it further studies the proposal to link 2G spectrum with that of 3G prices, GSM players are not expecting any major departure from what the regulator has already suggested.

Meanwhile, the Department of Telecom has constituted a committee to go through the TRAI recommendations.

source :: http://www.thehindubusinessline.com/2010/05/25/stories/2010052554080100.htm

As expected, Cartel (Airtel,Vodafone & Idea) approaches TDSAT

[kesav 127]

Cartel withdraws petition against TRAI recommendations

Incumbent operators, Bharti Airtel, Vodafone Essar and Idea Cellular were forced to withdraw their petition against TRAI’s recently announced recommendations on 2G spectrum allocation and pricing. The move followed TRAI stating before telecom tribunal, TDSAT that its proposals are recommendatory in nature and could not be challenged.

“Hence, it is premature for the petitioners to have approached the tribunal,” said TRAI counsel, Meet Malhotra.

The TDSAT Chairman, Mr Justice S B Sinha, allowed the operators to approach other appropriate forum on their grievance

source:: http://telecomtiger.com/PolicyNRegulation_fullstory.aspx?storyid=9211&section=S174

Since the recommedations are advisory nature, TDSAT feels it's not time to approach it and hence allowed Cartel to approach other appropriate forum

[kesav 127]

AUSPI asks TRAI not to show discrimination in inviting Vendors for 2G pricing discussion

CDMA lobby, AUSPI has asked the telecom regulator, TRAI to include Chinese vendors ZTE and Huawei in a meeting called by the regulator to discuss the issues related to recently announced 2G spectrum pricing and allocation.

TRAI has called representatives from Ericsson, NSN, Qualcomm and professors from IIT Chennai, Mumbai, Kharagpur, Hyderabad and IISs Bangalore for the meet scheduled on June 05.

"We strongly oppose the discussions with selected telecom vendors like Nokia and Ericsson who are major telecom network equipment providers to the old GSM operators like Bharti, Vodafone and Idea and they may not be able to give any independent view of the issue under discussion -- 2G pricing," said AUSPI.

"Nokia and Ericsson have vested interest of supplying equipment to the old GSM operators and their presence as well as their views will create a feeling of discrimination because of their vested interest in the supply of equipment to the operators like Bharti Airtel, Vodafone and Idea," AUSPI said.

"We, therefore, request that either the Chinese vendors -- Huawei and ZTE are invited to attend the TRAI meeting or none of the vendors should be invited including Ericsson, Nokia or Qualcomm," it said.

source :: http://telecomtiger.com/PolicyNRegulation_fullstory.aspx?passfrom=breakingnews&storyid=9276&section=S174

Very Very valid point from AUSPI.

Everybody in the world is aware of NSN & Ericsson 's bias towards GSM since they are from the land of non-CDMA (read as Europe).

TRAI being technology neutral regulator should see this issue in right perspective.

Certianly Huawei and ZTE are the vendors who can give proper information on both technologies since they've almost equal experience on both technologies(CDMA and GSM).

Hope this error will be rectified as fast as has been pointed out.

[kesav 127]

RCom seeks more spectrum for CDMA telephony growth

NEW DELHI: Anil Ambani Group firm RCom has demanded that the government should increase the spectrum limit for CDMA players and release more

spectrum for their growth.

"CDMA spectrum limit should be raised to 7.5 Mhz in respect of Delhi and Mumbai and 6.25 Mhz in the rest of the country against the proposed limit (as suggested by TRAI) of 6.25 and 5 Mhz respectively," RCom said in a letter to Telecom Minister A Raja.

It said TRAI has proposed an 8 Mhz limit for GSM spectrum in the rest of the country and 10 Mhz for Delhi and Mumbai, whereas the spectrum limit for CDMA operators was restricted to 6.25 Mhz.

"The authority has further increased the non-level playing field and discrimination, which has further risen in Delhi and Mumbai, where TRAI has suggested 10 Mhz limit for GSM and only 6.25 Mhz for CDMA technology," it said.

The company has also asked the regulator to recommend a growth path for CDMA players. DoT has already auctioned 3G spectrum in the 2,100 Mhz band, which is the forward path for the GSM players.

"DoT has not included the auctioning of 800 Mhz band for EVDO operations, which is a forward path for the CDMA operators. Make spectrum available for CDMA operators for their growth path and to have a level playing field," it said.

The company told the minister that TRAI has recommended refarming (re-use) of the spectrum at the time of license renewal, which it said would delay the process by another five years, since most of the licence renewals would come up after 2014 onwards.

"This will deprive the new telecom operators the advantages of refarming and the premium 900 Mhz spectrum will continue to be in the hands of a few old GSM players," the company said.

TRAI had suggested in its spectrum pricing recommendation that spectrum in the 800 and 900 Mhz bands should be refarmed at the time of licence renewal.

source:: http://economictimes.indiatimes.com/news/news-by-industry/telecom/RCom-seeks-more-spectrum-for-CDMA-telephony-growth/articleshow/5999454.cms

[kesav 127]

DoT wants to break free from Trai control, seeks legal opinion

DoT and Trai have been lately sparring over the former’s decision to alter licence terms under which telecom firms operate second-generation (2G) mobile services

New Delhi: The department of telecommunications (DoT) is seeking legal opinion on whether it can avoid consulting the Telecom Regulatory Authority of India (Trai) before making changes to existing rules that govern the telecom sector.

DoT and Trai have been lately sparring over the former’s decision to alter licence terms under which telecom firms operate second-generation (2G) mobile services.

“We have asked for a legal opinion since a number of issues have come up in the past that have led to some friction between Trai and DoT,” a DoT official said.

Another official confirmed that DoT was in talks with lawyers and the law ministry on the issue. Both spoke on condition of anonymity as they are not authorized to speak with the media.

The Trai Act makes it mandatory for DoT to consult the regulator before introducing new policies or licences for new technologies, such as high-speed third-generation (3G) mobile telephony. But the law is vague on the DoT’s freedom to tweak rules governing existing technologies, such as 2G services.

Until now, DoT has followed the norm of referring even minor changes to Trai. But it wants to change that now, after Trai said it should get the regulator’s opinion before changing policy regarding a so-called uniform licence fee for telecom companies.

A DoT panel had recommended that telecom firms be asked to pay a consolidated 8% licence fee for 2G services, instead of paying under different heads. The move followed allegations that telcos were reporting their revenues under heads that faced lower fees to reduce overall payment.

But Trai told DoT it should take the watchdog’s opinion before changing the policy, to which the government agreed. The issue was clubbed with Trai’s recommendations on overall 2G spectrum management and licence terms, in which the regulator proposed a uniform licence fee of 6%.

Mahesh Uppal, regulatory expert with Com First India Pvt. Ltd, said DoT does not need to ask for the regulator’s opinion for changing existing licences, but it has to do so for bringing in larger changes. “They are not expected to ask, but are obliged to.”

“Sometimes it is just better to go to Trai as many of the companies use it as a tool in the courts if we don’t go,” the second official quoted above said. “DoT is limited in this aspect as it cannot hold consultations with the industry like Trai can.”

The issue has wider ramifications as DoT is currently reviewing Trai’s recommendations on 2G spectrum management and licensing, which have been criticized by telecom companies.

A Mumbai-based analyst with an international brokerage firm said on condition of anonymity that if legal experts agree DoT does not need Trai’s approval for tweaking existing rules, it will heavily undermine the watchdog’s authority.

source:: http://www.livemint.com/2010/06/02225526/DoT-wants-to-break-free-from-T.html

Very Very Dangerous Move by DoT.

In any regulatory framework, the complete control on the policy should lie with Regulator.

Undermining that fundamental right of the regulator by quoting flimsy reasons is totally unwarranted and unacceptable.

This is an era of information technology. Hence we can easily harness the private sector's ERP platform to make the entire chain from pre-consultation to recommendations to implementation covering functions of both TRAI & DOT in a holistic e-workflow structure.

DoT only has power to consult back on the points where it becomes legally or technically impossible for it to implement.

DoT should not be allowed even to tweak a single word in policy without approval from TRAI.

The biggest issue currently we've is DoT is not paticipating in the consulation process of TRAI.

Certianly DoT is one of the stakeholders in any consultation process initiated by TRAI on telecommunication sector. why is it not participating then????

:confuse:

If DoT participates during consulation process, it can provide better suggestions to TRAI during the framing stage of recommendations itself.

[raccoon 53]

Interesting, thanks for posting. However, it is not related to this thread.

[kesav 127]

TRAI proposals aimed at bringing level playing field: Etisalat

TRAI has taken a right step in line with International Best practices to recommend the re-farming of 900 MHz spectrum that can be auctioned for 3G/4G services as elsewhere in the world, thus bringing more competition in 3G services which is not only good for the consumers but will also bring in more revenue for the Government.

TRAI Recommendations aimed at Optimizing Spectral Efficiency, Bringing a Level Playing Field, Pro- Consumer and Competition apart from increasing Govt. Revenues

TRAI has clearly reaffirmed that the issuance of 2G UASLs in the year 2008 to various operators like Idea (9 circles), Tata (3 circles), Shyam/ SSTL (21 circles), BPL/Loop (21 circles), Spice (4 (circles), Unitech/Uninor (22 circles), Swan/ Etisalat (13 circles), S -Tel (6 circles) was a correct policy initiative and was fully in accordance with the government policies to bring about more competition.

TRAI recommendations principally agree that spectrum is a scarce resource and must be put to more efficient use which will lead to spectral efficiency, thus resulting in overall optimum economic utilization of this limited national resource. This will also enable service providers to innovate and deploy the latest spectral efficient technologies. The earlier subscriber linked criterion was not conducive to achieve spectral efficiency, although it was achieving the purpose of substantial cost savings for the large players. The TRAI recommendations will also encourage vendors to bring in more spectrum efficient technologies to meet the unique requirement of such a vast and growing telecom market.

TRAI has taken a right step in line with International Best practices to recommend the re-farming of 900 MHz spectrum that can be auctioned for 3G/4G services as elsewhere in the world, thus bringing more competition in 3G services which is not only good for the consumers but will also bring in more revenue for the Government.

TRAI Recommendations also establish the fact that all service providers require a minimum of 6.2 MHz which is also the contractual spectrum as per the license and to this extent, TRAI has rightfully recommended to narrow the gap of existing non-level playing field, which was created by historical policy anomalies. By recommending that spectrum in excess of 6.2 MHz should be charged at the current price by all existing or new players, it has further tried to bridge the non-level playing field existing till date.

The uniform License Fee at 6% will help the service providers in substantial cost savings that should help in making services more affordable.

However, in-spite of progressive recommendations aimed to reduce the inequities as also to increase the government revenue; some of the recommendations will increase cost and may face implementation challenges e.g. to achieve the coverage through rural rollout in next one year, that may increase the costs, M&As and spectrum sharing.

source:: http://www.indiainfoline.com/Markets/News/TRAI-recommendations-aims-at-optimizing-spectral-efficiency-bringing-level-playing-field-Etisalat/4839813748

Edited June 4, 2010 by kesav

[kesav 127]

Tata Tele suggests formula for pricing excess spectrum

Tata Teleservices has suggested that the price of each MHz of excess spectrum beyond 6.2MHz in the 1800 Mhz band should be 1.67 times the 3G price set through the recent auction. And, for excess spectrum in the 900 MHz band, the price should be 2.67 times that of the 1800 MHz band.

The company was responding to the Telecom Regulatory Authority of India’s request for inputs on linkage of 3G prices to the current price of spectrum, it said in a statement.

The date of charging should be from the date of allotment of the excess spectrum. The company also recommended levying of 12 per cent compound interest on the excess spectrum charges from the date of allotment, it said in its response to Trai. State-run telecom majors BSNL and MTNL, as well as others such as Bharti Airtel, Vodafone Essar and Idea Cellular, hold spectrum beyond the contractual limit in many circles.

Trai had, in its recommendations in May, said the operators would need to pay for the excess spectrum beyond 6.2MHz as per the price discovered through the 3G auction. Second, spectrum in the 800 and 900 MHz bands should be refarmed and operators moved to a different band when their licences come for renewal.

These recommendations were strongly criticised by existing mobile operators, including Airtel, Idea and Vodafone. They would have to pay a huge amount if the Trai recommendations were accepted by DoT.

It had also started a controversy as experts and industry people feel the prices of 2G spectrum could not be linked with 3G, as these are two different technologies and 3G was thrice as efficient as the 2G frequency.

The regulator had asked for the comments of all service providers by June 15. However, according to reports, Bharti, Vodafone and Idea have refused to participate in the process. After receiving all the inputs, Teai would consult and come out with a final view on spectrum pricing and refarming by July 15.

source:: http://www.business-standard.com/india/news/tata-tele-suggests-formula-for-pricing-excess-spectrum/399033/

[kesav 127]

FinMin asks DoT to decide on Trai report on 2G

The finance ministy has asked the telecom ministry to take a quick decision on the recommendations of telecom regulator Telecom Regulatory Authority of India(Trai) with regard to allocation and pricing of 2G spectrum.

Trai had submitted its report — Spectrum Management and Licensing Framework — more than a month ago.

It had recommended capping the quantity of spectrum in each circle to 8 MHz, other than in Delhi and Mumbai, and price the extra spectrum beyond 6.2 MHz held by operators at a rate equivalent to 3G, for which the price was discovered recently through auction.

Bidding for pan-India 3G licence touched Rs 16,759 crore.

“In this context, we reiterate our earlier advice and recommend that the entire issue relating to allocation and pricing of 2G spectrum (GSM/CDMA) may be placed before the Telecom Commission at the earliest opportunity so as to evolve a coordinated view in the matter,” Finance Secretary Ashok Chawla said in a letter Telecom Secretary P J Thomas.

The Department of Telecommunications had constituted an internal committee to look into the recommendations of Trai and place it before the Telecom Commission.

The GSM operators including Bharti Airtel, Vodafone and Idea Cellular had opposed the Trai recommendations, telling the government there were “retrograde” and “absurd”.

They are critical of capping the spectrum at 8 MHz in all circles except Delhi and Mumbai, where the limit is 10 MHz, as they think it would restrict future growth.

According to them, the Trai recommendations, including those on pricing of spectrum beyond 6.2 MHz, are bad for incumbent mobile operators, as paying higher fees for existing as well as future 2G spectrum will be a big financial burden on telcos, especially Bharti and Vodafone, as their profits have already come under pressure due to an intense rate war.

Trai had also come under attack for recommending refarming of spectrum according to which players holding spectrum in the 900 MHz band would be asked to return excess spectrum as and when their licence comes up for renewal.

The finance ministry would take a final call on the pricing of 2G spectrum, for which Trai has decided to hold separate discussions with telecom operators and is expected to give its views by the end of next month.

source:: http://www.business-standard.com/india/news/finmin-asks-dot-to-decidetrai-report2g/01/15/398279/

[kesav 127]

PMO calls for review of TRAI recommendations by an inter-ministerial panel

The Prime Minister’s Office (PMO) has asked the inter-ministerial panel handling 3G spectrum pricing to review the recently announced recommendations of TRAI over 2G spectrum allocation and pricing.

"It may be desirable to take a decision on the recommendations after ensuring full deliberations on all aspects. Against this background, the Department of Telecom is advised to consider widening the mandate of the EGoM to also include taking a view on the Trai recommendations," said PMO to DoT.

source:: http://telecomtiger.com/PolicyNRegulation_fullstory.aspx?storyid=9528&section=S174

We hope and pray EGOM will make speedy and operator neutral decision instead of being influenced by Cartel's (Airtel,Vodafone & Idea) paid media campaign.

Let EGOM ensures natural justice will prevail over influenced(by Cartel) justice.

Let EGOM ensures that the regulatory power of one India's finest regulator(TRAI) is not being eroded by lobbyist like Nira Wadia(who works for business thugs like Sunil Mittal).

Let the core spirit behind the TRAI's recommendations "neutrality and equality" previals.

Edited June 30, 2010 by kesav

[kesav 127]

PMO Directs Telecom Min. To Take Law Ministry's Advice On 2G Issue

The Prime Minister's Office, or PMO, has directed the Telecom Ministry to take the Law Ministry's advice regarding allegations, complaints and court cases over allocation of 2G spectrum in 2008, say reports.

The directive follows the Department of Telecom's (DoT) response to Janata Party President Subramanian Swamy's petition in the Delhi High Court last month seeking its direction to scrap the 2G spectrum allocation to telecom companies, such as Swan (now DB Telecom), Unitech, S-Tel among others, on the ground that the procedure followed was arbitrary, illegal and against the norms.

The response of the department was considered in the PMO and it was felt that the matter presently being sub-judice only strengthens desirability of taking the Law Ministry's advice, said the PMO in a letter to Telecom Secretary P.J. Thomas.

DoT earlier indicated the PMO that it followed the recommendations of the regulator Telecom Regulatory Authority of India, or TRAI, in issuing the new licences. DoT allots spectrum and licences on a 'first-come-first-serve' basis.

The PMO's direction is also triggered by another similar case filed by Swamy before the Delhi High Court seeking an explanation from Prime Minister Manmohan Singh as to why the government did not take action against Telecom Minister A. Raja in the alleged 2G spectrum allocation scam.

Raja came under severe criticism for under-pricing of the 2G spectrum in 2008 to some companies at a price fixed in 2001, causing loss to the exchequer between Rs.26,000 and Rs.60,000 crore.

Multiple agencies such as the Central Bureau of Investigation, the Central Vigilance Commission and the Comptroller & Auditor General (CAG) of India are investigating the allegations.

Swamy in April wrote to Singh demanding immediate cancellation of 2G Spectrum allotment to new entrants on the 'first come-first served basis' and at 2001 fixed prices.

A very good move by PMO.

:clap:

It's highly important to consult law ministry since DoT's arbitrary shifting of cut-off date was slammed earlier by supreme court.

Edited June 30, 2010 by kesav

[kesav 127]

DoT wing(WPC) seeks higher spectrum fee

NEW DELHI:THE wireless planning cell (WPC) of the department of telecommunications (DoT), the agency responsible for awarding airwaves on which all

mobile services operate to service providers, wants the government to impose a higher annual fee for the use of spectrum.

Sector regulator Trai has recently recommended that GSM operators share between 2.2% and 10% of their annual revenues as spectrum usage fee, but WPC wants this to be raised to 3-10%, with higher revenue share ratios for each slab.

WPC was replying to Trai’s recommendations. Its response will now be forwarded to the empowered group of ministers (EGoM), headed by finance minister Pranab Mukherjee. The Prime Minister’s Office had recently asked DoT to transfer all policy issues related to Trai’s latest recommendations on spectrum and licensing issues to EGoM.

This was also an indicator that the Centre does not want further controversy by entrusting telecom minister A Raja with policy decisions relating to spectrum or telecom licensing.

DoT has now approached the Cabinet secretariat to widen the scope of the earlier EGoM, also headed by Mr Mukherjee, that was looking into issues related to vacation of 3G spectrum by armed forces and the auction of these airwaves, to include policy issues associated with Trai’s latest proposals.

DoT has also constituted a nine-member committee, headed by its member technology, to study Trai’s recommendations. This panel will submit its report to EGoM.

EGoM may also go with WPC’s demands as it will increase the contribution of telcos to the exchequer. If the WPC’s suggestions are converted in to a policy, this will lead to an increase in the existing levy structure for telcos. For instance, a GSM operator that has only start-up spectrum at present, shares 2% of its annual revenues as spectrum usage fee.

While Trai recommended that this be hiked to 2.2%, the WPC wants it increased to 3%. Similarly, in the case of an operator that has 6.2 MHz of airwaves, the telco at present shares 3% of its annual revenues as spectrum usage fee and this will increase to 3.9% under the WPC methodology.

The key difference is that the WPC wants the minimum spectrum usage charge to be fixed at 3% of the telecom companies annual revenues as against Trai’s proposal of 2.2% and 1.25% for GSM and CDMA-based operators, respectively.

At the same time, WPC has endorsed Trai’s suggestion that “spectrum usage charges, both for GSM and CDMA spectrum, should be at the rate of 0.5% for every MHz up to the contracted spectrum, and at the rate of 1% for every MHz in respect of spectrum beyond the contracted quantity, subject to a limit of 10% in respect of GSM and 7% in respect of CDMA”.

source:: http://economictimes.indiatimes.com/news/news-by-industry/telecom/DoT-wing-seeks-higher-spectrum-fee/articleshow/6132890.cms

[kesav 127]

Approach TRAI to surrender 2G: Raja

CHENNAI: Union Minister for Communications and Information Technology A. Raja on Saturday said the Telecom Regulatory Authority of India would look into refunding the entry fee for operators who wanted to surrender allotted 2G spectrum.

Talking to journalists on the sidelines of the annual conference on Indian Intraocular Implant and Refractive Surgery here,' he recalled his suggestion to the telecom operators that they make a representation to the TRAI.

When the issue of fixing charges for occupying spectrum was discussed on Friday, a few operators wanted to surrender 2G spectrum on the ground that their operations were not viable. They told Mr. Raja that they were not able to compete in the present circumstances. I informed them that there was no such provision to surrender. Still I have asked them to make a representation to the TRAI, he said.

source:: http://www.hindu.com/2010/07/11/stories/2010071156151000.htm

It's important that TRAI formulates policy guidelines for the return of spectrum if the operator does not need it or operator not able to use it efficiently as per TRAI standards.

Spectrum is a vital natural national resource and it should be easily transferable to the nation's pool and it should not be captive at the hands of operators who cannot use it efficiently.

Edited July 12, 2010 by kesav