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In 2010, Trai said 2G=3G. Will it change its mind? PDF Print E-mail
Friday, 14 January 2011 00:00
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Will the Telecom Regulatory Authority of India (Trai) bail out Kapil Sibal? One of the methods used by the telecom minister to whittle down the CAG’s estimate of the 2G scam was to say that 2G spectrum was a third or less as efficient as 3G spectrum, and so the 3G figures had to be reduced accordingly. Trai will be coming out with its report on the relative pricing of 2G and 3G spectrum within the next few days. An outside consultant, a former Trai staffer, has been assigned this job. The question is whether the Trai report will have the same 2G-3G differential the minister announced in his press conference last Friday?

On May 11, 2010, the Trai had argued, largely in line with global practice, that there was little difference between 2G and 3G spectrum. Spectrum, after all, is spectrum and becomes 2G, 3G or 4G only on the basis of what services the government allows telcos to offer on it – in quite the same way a plot of land is agricultural, industrial or commercial depending upon what usage norms the government specifies. It was on this basis that the Trai recommended that the ‘extra’ spectrum that firms like Bharti, BSNL, Vodafone and MTNL had, beyond the 6.2 MHz specified in their licences, be priced 1.3 times of what was arrived at through the 3G auctions in case the firms held more than 8 MHz of spectrum – if the spectrum was in the 900 MHz band, as in the case of BSNL and MTNL especially, the “extra” spectrum was to be charged for at 1.5 times the 3G price.

It was on the basis of the Trai recommendations that the CAG also included, and later highlighted, the losses in the Raja scam on the basis of the 3G prices as well.

Since there had been no public consultation on this issue, while giving its recommendations, the Trai had, however, qualified this by saying it would revisit the exercise after a public consultation. This new exercise is presumably part of that.

Though Trai is supposed to be an independent regulator, a large proportion of the recommendations of various Trais have tended to be in line with what the government of the day wanted. In 2003, Pradip Baijal’s Trai recommended a Universal Access Service Licence which allowed Arun Shourie to convert limited mobility licences to full-blown mobile licences; in 2007, Nripendra Misra recommended not auctioning 2G spectrum which helped A Raja give licences at bargain-basement prices (Misra later said Raja had cherry-picked his recommendations).

 

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