NEW DELHI: The Telecom Regulatory Authority of India (Trai) favours the auction route when it comes to spectrum allocation.

Trai chairman Nripendra Misra told DNA Money on Friday that spectrum must be priced, and for that, auction of this scarce resource is the best option for telecom and broadcasting services in India.

Whether it’s for mobile phone services (including 3G), mobile television, wireless broadband, or FM radio, Trai favours auction of spectrum.

Trai is expected to recommend auction of spectrum used for offering TV services on mobile phones next week.

The regulator would send its recommendation on mobile TV to the information and broadcasting (I&B) ministry, Misra said earlier in the day at the telecom summit organised by the Federation of Indian Chambers of Commerce and Industry (Ficci).

The I&B ministry had sought Trai recommendations on licence conditions for mobile TV.

Among the priorities of Trai is to delink the telecom licence from spectrum allocation.
Currently, a mobile service provider (2G) pays Rs 1,651 crore for pan-India licence, and gets a start-up spectrum of 4.4 MHz with it.

There’s no additional payment to be made for spectrum allocation.

However, things may change soon. It is learnt that a committee in the Department of Telecommunications (DoT) is assessing the value of spectrum that is allocated to telcos.

On whether Trai’s views have been sought by DoT on arriving at the value of spectrum to be allocated to telcos, Misra said that the regulator is not involved in the process.

However, he pointed out that start-up spectrum would not be valued at anything less than Rs 6,000-Rs 8,000 crore, if there’s a process of auction. According to Trai estimates, the base price for pan-India wireless telephony spectrum could be around Rs 1,800 crore, and auction would take the level to Rs 6,000-8,000 crore.

Meanwhile, the telecom regulator is all set to begin a consultation process on spectrum management.

For this, the regulator would study the international models for technology and methodology of spectrum allocation and management.

Even mobile virtual network operation (MVNO), which is quite prevalent in the developed markets, would be part of the Trai study.

Chalking out the Trai goals for 2008, Misra said the regulator would empower the consumer and telecom service providers through a process of de-regulation.

That is, consumer groups and service providers may be given some of the functions of the regulatory framework shortly, Misra indicated.

As for telecom tariffs, the forbearance regime would continue, rather than imposing a cap on tariffs.

De-regulation by the regulator is an internationally accepted practice. As pointed out by Cisco senior managing director Robert Pepper, who was earlier one of the driving forces at the Federal Communications Commission (the telecom and broadcasting regulator in the US), “Regulation should be limited in scope and time”.

Speaking at a conference on Friday, he said, “When a problem is solved and competition develops, the regulator must step back.”