Cabinet clears liberalisation of spectrum at Trai rates

The Union Cabinet has cleared liberalisation of spectrum — allocated without auction to telecom companies — at Trai recommended price with the balance being collected after deriving market rate through bidding.  The Cabinet decision taken on Wednesday will enable Reliance Communications (RCom) to liberalise its 

spectrum in four telecom circles, where auction determined price is not available, for Rs 1,300 crore. A liberalised spectrum allows telecom operators to use any technology to deliver mobile services like 3G and 4G. 

Besides, they will be able to introduce new technologies and share and trade it with other operators for its efficient use. “The meaning of this Cabinet decision is that wherever administratively allocated spectrum is available, whose liberalisation is sought and whose market determined price is not available, then in that case Trai’s recommendation on auction for price shall be taken as provisional standard and after actual auction, the balance will be taken,” Telecom Minister Ravi Shankar Prasad said on Wednesday. 

Earlier, telecom firms were given 4.4 MHz spectrum alongwith licence for Rs 1,658 crore for pan-India operations and later they were entitled to get another 1.8 MHz on fulfilment of certain subscriber-based criteria. Some telecom operators were allocated even more spectrum after qualifying some criteria without auction. Spectrum allocated in this manner could be used only to provide service as allowed in the licence. The previous government had decided that the operators should pay for holding spectrum above 6.2 MHz retrospectively, from July 2008 to January 1, 2013. 

After that, for spectrum above 4.4 MHz, they would have to pay for the remaining period of their licences based on auction held in November 2012. Prasad said the Cabinet had earlier decided that liberalisation of spectrum will be done on the basis of market determined price. “It was found that in 800 Mhz spectrum band, market price was not available in many states. Like in some places it was not available for sale and in some it was not sold (in auction). 

“There was a view that such question can arise in case of other spectrum band as well,” he said. Prasad said that the government sought recommendations of Telecom Regulatory Authority of India on this issue.