The TRAI recommended that the price of Rs 4571 crores per MHz for the 2G spectrum beyond 6.2 MHz should be collected from the operators was accepted by the DoT’s Committee. The Committee said that the one-time fee has to be calculated on a pro-rata basis from May 2008 till the remaining period of the license. Airtel, Vodafone etc are having 2G spectrum upto 10 MHz in some circles. They have to pay this fee accordingly.
The DoT Committee also accepted the TRAI’s proposal to price the spectrum in 900 MHz band 1.5 times higher.
While the TRAI recommended uniform licence fee of 6% of the annual revenue, the DoT Committee did not accept it and proposed a uniform fee of 8% of the revenue. At present Operators pay between 6% to 10 % of revenue as licence fee. A flat rate of 8% will increase the licence fee in some cases and decrease in some cases.
The recommendation of thee TRAI to limit the auction of 700 MHz band sopectrum only to those operators which do not have spectrum in 800 MHz and 900 MHz band. This means Airtel, Vodafone and Reliance Communications having 800/900 MHz band spectrum cannot participate in 700 MHz band spectrum required for 4G broadband services. Only Reliance Infotel and the new GSM operators(Uninor, Loop etc) which got spectrum in the 1800 MHz band will be eligible to participate in &00 MHz band spectrum auction.
While the TRAI recommended that the Companies so formed after Merger/ Acquisitions among existing Companies can have market share upto 35% without permission and upto 60% with permission. But the DoT Committee decided that the market share of any company should not be beyond 35%. However the TRAI’s suggestion that the merged entity can have a share in the spectrum upto 25% is approved by the DoT Committee.
The above is the news reported in “The Hindu Business Line” dated 23/11/2011.
At present Airtel is having a market share of 20% in customers and 29% in revenue whereas BSNL is having a market share of 11% in customers and 8% in revenue. The combined market share in customers for the 4 companies Airtel, Vodafone, Idea and Rekiance Communications put together is 75%. If the market share of any company is allowed to go upto 35% as decided by the DoT Committee, it will be a monopoly and only 2 Companies can control 70% of the market share. Allowing such a monopoly is against the interest of the customers since these monopolies will collaborate and will increase tariff. Also since they need not compete much, they can collaborate together and stop improving the standards of the service. Thus this is against the interest of the people.
The DoT Committee’s views were put up for the decision of the Telecom Commission which is expected to meet on 28/11/2011.
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