Trai proposes easier M038;A rules,retains plans to raise 2G price

Trai chairman JS Sarma said he will also retain its plans to raise the price of 2G spectrum by six times.

Operators have urged the regulator to hasten consolidation in the fifteen-player market where mounting losses have led to a 50 per cent fall in investment over the past year,according to accountants PricewaterhouseCoopers.

Analysts have said mergers are limited by rules that restricted them between companies with a combined share of more than 40 per cent of the market.

But Sarma said the proposed rules would lead to consolidation if adopted by the government.

He said,We expect that there would be lot more of mergers taking place in the course of next year or two, Sarma told a FICCI meet.

The regulator proposed a uniform licence fee of 6 per cent of annual revenue to replace the present charge,which varies between 6 and 10 per cent. Companies can also share spectrum for five years and renew their arrangements for another five-year period.

It also told the Department of Telecom that it would limit the auction of the 700 MHz band initially to operators that do not have spectrum in the 800 and 900 MHz band. Holders of the 800 and 900 MHz band would pay the market price.

Trai is also reviewing the use of spectrum by government agencies.

RS Mathews,secretary general of the Cellular Operators Association of India,said,Recommendations on Mamp;A,uniform licence fee and rationalisation of spectrum limit would be positive for the telecom industry,which is reeling under high operational costs.

He was disappointed,however,that Trai had retained its proposal to raise the 2G spectrum price by six times.

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