TRAI sees no tariff hike due to excess spectrum charge

The Telecom Regulatory Authority of India (TRAI) says that there will not be any increase in tariffs due to the one-time charge on excess spectrum that some telecom operators in the country need to pay. Last week, the Authority had announced its recommendations on ‘spectrum management and licensing framework’ and had said that operators such as Airtel, Vodafone, BSNL and MTNL, who are holding more than 6.2 MHz spectrum, are expected to pay an amount equal to the current 3G price, for that excess spectrum.
Speaking to reporters at an open house discussion here, JS Sarma, chairman, TRAI, said, “The amount is going to be quite small and I don’t think it is going to matter either in terms of their (telecom operators’) operating profits, or tariffs.”
Sarma said that he does not see any hike in tariffs due to three reasons. Firstly, the impact of this on those telcos who have to make the payout will be very limited. Moreover, he said that those telcos who cover a certain percentage of habitation will get incentive in terms of reduction of licence fee.
“The amount of payout will be only Rs 14,457 crore for all the operators put together. This is less than the price of one block of 3G spectrum. So for each operator it will be less than Rs 3,500 crore,” added Sarma.
Secondly, in the present situation, not more than two to three operators will be paying out for this excess spectrum.
Thirdly, said Sarma, the payout will be amortised for a number of years. Whatever is going to be paid will be in the form of capex (capital expenditure) and the impact of capex in price fixation will be lower than that of the opex (operating expenditure).
Sarma made it clear that TRAI is not going to rework the recommendations. He said that the Authority has already met the operators and discussions have been held, but that they are still open to discussions as and when required. He also said that it is difficult to say whether the price of excess spectrum will go up or down, and that for the present, has been equated to that of 3G.
Sarma said that the final report on this will be ready in the next few weeks, most probably by June end.