The reserve price for the telecom spectrum auction recommended by TRAI is extremely high and will hurt inclusive growth and will also be detrimental for the growth of the sector, an industry body said on Sunday.
Telecom Regulatory Authority of India (TRAI) has proposed a pan-India spectrum reserve price at Rs.3,622.18 crore for a 5 megahertz (Mhz) block in 1800 Mhz band.
"Reserve price for the auction of spectrum as recommended by TRAI is extremely high, which will hurt the overall national interests, inclusive growth and will be detrimental for the growth of the industry particularly the expansion of telecom and broadband services in the rural areas," Confederation of Indian Industry (CII) said in a statement.
On Feb 2, the Supreme Court had ordered the cancellation of 122 telecom licences and asked the government to redistribute the licences through auction. Now, the TRAI has come up with recommendations for the auction.
The proposals have received strong criticisms from the industry and sector watchers alike, following which the Telecom Commission has sought more information and clarifications from the regulator on its recommendations.
According to CII, this move would lead to expensive mobile tariffs while for the socio-economic benefits and inclusive growth its important that mobile tariffs continue to be affordable. Therefore it is essential that the spectrum should be made available at a reasonable price.
In its recommendations to the Department of Telecom (DoT), CII has said that the amount of reserve price for 2G spectrum auctions as recommended by TRAI do not appear to be based on realistic techno-economic principles.
"It is also extremely high as compared to TRAI's own recommendations made earlier in February 2011, which were re-confirmed by TRAI in November 2011."
It has requested that the recent Indian market experience on severe financial constraints being faced by the industry needs to be kept in view.
CII has recommended that the spectrum auctions should be appropriately designed to serve the overall national and societal interests and to encourage faster rural roll-out by operators.
CII has also recommended that all available amount of spectrum should be made open for upcoming auctions to avoid any artificial scarcity. If necessary, some spectrum should be released from other existing users.