New Delhi, November 12: Expressing dismay at the new reserve price of spectrum set by TRAI, the BJP on Tuesday said the steep reduction in costs will benefit a few operators and cause a loss to the exchequer and demanded that Prime Minister ask his office to reject the recommendations.
Senior BJP leader Yashwant Sinha has written a letter to Prime Minister Manmohan Singh, saying he is appalled and dismayed at the recommendations of TRAI. He has said that the proposed steep reduction in spectrum reserve price and Spectrum Usage Charges (SUC) will favour few operators at the cost of national exchequer.
Mr. Sinha has pointed out that TRAI has reduced the price of 1 MHz of spectrum pan-India by 37 per cent, and the reduction is much steeper for key circles like Mumbai and Delhi at 50 per cent.
“With these reserve prices and the amount of spectrum intended to be auctioned in the forthcoming auction, the potential loss to the government can be as high as Rs. 35,000 Crore,” Mr. Sinha said in his letter.
The former Finance Minister noted that these recommendations of TRAI contradict its own arguments. Last year, TRAI had defended and justified the reserve price of Rs. 3,622 Crore for pan-India 1 MHz spectrum in the 1,800 MHz band. It had also insisted that impact of recommended reserve price on telecom tariff to subscribers will be negligible, Mr. Sinha added.
“I fail to understand why the same body now has junked its own recommendations within one year and has recommended such a steep reduction in the reserve price. This is not expected from a sector specialist regulator,” Mr. Sinha said.
The BJP did not buy TRAI’s argument that steep reduction has been done for forthcoming auctions as the auctions held in November 2012 and March 2013 had been failures.
Mr. Sinha said auctions had failed due to collusion and cartelisation of the incumbent operators and not high prices.
“I urge your office to take immediate remedial measures and in order to realise the true economic value of spectrum and to uphold the interest of Indian citizens and the revenue objectives of the government, the recommendations of TRAI with respect to reserve price and SUC should be rejected forthwith,” Mr. Sinha said.
Mr. Sinha insisted that, contrary to TRAI’s belief, the telecom sector in India is showing robust growth at present.
The BJP leader said TRAI has also recommended reduction in the SUC from the present 3 to 8 per cent to just 3 per cent in all cases. Citing an example, he claimed that some of the operator companies are generating a revenue of more than 10 per cent per year and paying only up to 6 per cent SUC.
Batting against reducing SUC to just 3 per cent, Mr. Sinha said, “Government will not only be giving away precious spectrum to these operators free of cost, without earning a singly penny for the exchequer but will also enable the incumbent operators to garner windfall gains.”
BJP charged that the new reserve price recommendations of TRAI are intended only for the gains of a few incumbent telecom operators at the cost of national exchequer and are at “total variance” with the law laid down by the Supreme Court.
“It is the duty of the government to ensure that this does not happen,” Mr. Sinha said.
