DoT to form panel for spectrum pricing

The department of telecom (DoT) has decided to set up a committee for spectrum valuation and pricing. This significant step follows a TOI story on August 2, revealing that the defence ministry in a late July communiqui, has refused to vacate spectrum till a secure alternate communications network for all three wings of the defence forces is built.

The cost of this exercise is estimated at upwards of Rs 6,000-8,000 crore with annual expenses at over Rs 1,000 crore, Pressure, on account of extremely public altercations between GSM and CDMA operators on the value and process of allocation of spectrum, is also a strong trigger, evident from the fact that the committee has been given just six weeks to submit its report.

CDMA firms allege that GSM operators have received spectrum far more than the contracted amount of 4.4 to 6.2 MHz, without any policy to support such allocation. Pressing for an investigation, they have urged government to extract a fair value of spectrum given above the contracted amount.

However, GSM players insist that they have paid Rs 1,800 crore for use of spectrum over and above the entry fee and an additional Rs 6,000 crore is payable over the next few years, even if the current policy continues.
CDMA and GSM operators also disagree on whether or not the current policy of subscriber-linked allocation can continue. It is in this background that the committee will make its evaluation.

The committee is being chaired by deputy director general (WPF), with joint wireless advisor, DDG-access services and deputy wireless advisor as members. It is expected to take into account existing practice and all other relevant aspects for determining appropriate spectrum valuation and pricing.

Th e committee can consult experts and obtain views of various stakeholders as appropriate. This provides an opportunity to contradict rivals positions on spectrum valuation.

The committee may also invite international experts who have global experience of spectrum valuation apart from existing operators, confirms a DoT official. The committee's mandate includes reviewing current spectrum charges to ensure optimum use of scarce resource of RF spectrum, taking into account the need for similar level of charges through different methods.

It will also examine the need for differential pricing for various parts of spectrum (frequency bands) considering the level of demand (high, medium or low), to encourage users to move from highly congested parts to others. Further, it will examine the need for differential pricing for usage in different areas of the country.