DoT fears TRAI's pay per-sec plan can impact 3G bids
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New Delhi: The Department of Telecom (DoT) has expressed its concerns over the telecom regulator Telecommunications Regulatory Authority of India (TRAI)'s proposal to make at least one 'pay per second' plan mandatory for every mobile operator. The DoT does not have any statutory powers to engage in tariff or interconnection issues, which fall under TRAI's jurisdiction, this can be seen as an standoff as it carries the potential of placing 3G auction revenues at risk, which is a key priority for the UPA government. "It is unfortunate that this announcement was made in Geneva at a global telecom event. We fear it could impact potential 3G bids. Bidders cannot ignore the revenue implications of this move and their bids will be adjusted downwards accordingly. This is a local consumer and tariff issue, and should have been done keeping in mind the overall environmental sensitivity," a senior DoT official told the Economic Times. DoT's concern is that if tariffs take a further dive and profitability margins are hit, then potential bidders will turn 'conservative' on their bids. DoT believes that the market is too sophisticated and funding too slim for the operators to gamble with high bids. India has been gearing up for 3G spectrum auctions for almost a year now. These auctions are projected to raise up to 28,000 crore for the exchequer. This estimation is based on 3500 crore reserve price, which is expected to fetch over 7000 crore for each pan-India 3G slot. "Potential bidders include large, global telecom operators deploying the most sophisticated bidding tools. The timing of the announcement just before the 3G auctions and its positioning as a mandatory option is worrying," the DoT official added. India has amongst the lowest tariffs in the world with average revenues per user (ARPU) falling below 200 per month.

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