Auctioning spectrum will hit growth-TRAI
By agencies   |   Thursday, 02 June 2005, 19:30 IST
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NEW DELHI: Telecom Regulatory Authority of India (TRAI) Chairman Pradip Baijal has said that auctioning spectrum especially for 3G services will choke the growth in the telecom sector. ''If you don't give 3G spectrum free to the existing operators, you will choke their growth,'' the TRAI chief said. Stating that consumers and growth was top of his agenda, Baijal said that 3G services were auctioned in Europe, the governments made huge money, but the growth of 3G got stunted. Baijal added that in India too there was a huge entry fee when auctions took place in 1994. He said that at time the telecom companies were unable to pay and so ''we shifted to revenue share which saved the telecom sector.'' On Ratan Tata's offer that telecom companies should pay Rs 150 billion for 3G spectrum, Baijal said,'' Ratan Tata will pay Rs 150 billion, maybe three or four others also will. We will get Rs 600 billion but the telecom industry will not grow.'' Baijal said that he has recommended more spectrum for both GSM and CDMA players. He pointed out that there is spare CDMA spectrum but not extra GSM spectrum. He said this would only be available till the armed forces vacate it, Baijal said. Baijal said that he had told the army that it should vacate part of the 1800 and 2000 MHZ. Since the 2000MHZ can be relieved faster than 1800 MHZ, the former could be given to 2G operators as they are on the verge of choking. ''I said, give them 200 MHz free- they will transfer some of their subscribers who are on 1800 MHz to 2000 MHz, especially consumers who can afford 3G telephony,'' f Baijal said. Baijal said for the time being 3G spectrum can be used for the expansion of 2G services.'' I'm not saying that there'll never be an auction. I'm saying, give the existing companies enough to match global benchmarks, and if there's extra, auction that.'' The TRAI chief admitted that he wouldn’t be able to give adequate spectrum to GSM and CDMA companies. He said the only policy option is to take 3G spectrum and develop 2G kind of services till you come to 3G services and equipment. "There is no shortage of spectrum in rural India. We are recommending changing the policy for greater rural coverage." A controversy has brewed after TRAI gave its recommendations for spectrum policy recently. Ratan Tata wrote a letter of Communications and IT Minister Dayanidhi Maran urging that 3G Spectrum should be paid be paid for and has recommended Rs 150 billion. The Finance Ministry has written to the department of telecom (DOT) asking it to auction spectrum. Some experts say that cash collected from auctioning spectrum could be used to increase both teledensity and rural telephony. TRAI maintains that paying for spectrum would only make 3G services more expensive.

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