Mired in the controversy over the 2G spectrum allocation in 2008, the Department of Telecommunications (DoT) has decided to ensure optimum utilisation and maximum revenue generation from this scarce resource through a policy mechanism.
Under its soon-to-be-released National Telecom Policy-2011, the DoT will ensure that no operator is allowed to “hoard” spectrum, a practice that hinders the growth of the entire telecom sector and causes the exchequer loss. It will allow sharing, pooling and trading of spectrum for its more efficient use.
“In the new policy, telecom operators will have to pay for [the] entire spectrum they possess... This will help [the] government earn more revenue, besides ensuring optimum utilisation of radio waves. There will be no free spectrum… Companies will have to pay for idle spectrum through a presumptive adjusted gross revenue (AGR) mechanism. This will make hoarding of spectrum expensive for companies, thus discouraging them from doing so,” Telecom Secretary R. Chandrashekhar told The Hindu .
Currently, the operators pay a certain percentage of their AGR to the government in spectrum charges, while paying nothing for the unused radio waves they hold. There have been instances of operators having been found “hoarding” spectrum in some circles, where other operators were waiting to start their services for non-availability of spectrum. This not only stifles competition but also hinders growth and expansion of the sector.
“Today, enough spectrum is available to meet [the] requirements of all operators, while efforts are on to get radio waves vacated from other government organisations, like the defence forces and the Department of Space, to ensure increase in mobile and broadband penetration as well as introduction of newer technologies. What is required is proper management of spectrum… the new telecom policy will ensure efficient use of radio waves,” Mr. Chandrashekhar said.
CAG report
Notably, in its report for 2010-11, the Comptroller and Auditor-General of India pointed out that nine operators, including Bharti Airtel, Reliance, Vodafone, Idea, Aircel, BSNL and MTNL, were allotted spectrum far and above the upper limit fixed in the telecom licence agreement, and this could have helped the government earn an additional Rs. 36,993 crore.
In September this year, the DoT informed the Rajya Sabha that in May 2009, its technical committee recommended that the additional spectrum assigned to operators should attract an upfront charge equivalent to the 3G auction price from the date of assignment of radio waves. In May 2010, the Telecom Regulatory Authority of India, too, recommended charging of the additional spectrum being held by the operators. But the DoT is yet to take a decision.
