New Delhi January 31:
The government expects market competition and number portability to ensure reasonable tariff for subscribers despite the Centre's new policy of charging operators for additional spectrum and ushering an auction-based pricing.
With some operators speaking of telecom services costing more in view of added costs the new policy entails, the government did not rule out a more unfettered play of market forces but felt increase in subscriber costs need not be the obvious impact of new charges being levied on air waves that were previously not charged.
"There can be some fluctuations in rates but I think number portability and more open competition will mean rates remain reasonable. The customer will get low tariffs, the telecom sector can make reasonable profit and the government will get its revenues too," telecom minister Kapil Sibal said. The minister said not adopting the auction route had drawn flak and now that the government was saying all spectrum would be charged and new allocations would be auctioned, the question of cost was raised. "You can't have it both ways," he said, pointing out that the policy aimed to make the processes transparent.
The government believes charging for additional spectrum allotted to telecom service providers is essential to restore public faith in accountability and regulation of the sector. In the past no operator, either new or an early mover, paid for additional spectrum and this anomaly needed to be addressed. On the demand that new players be allowed 6.2 Mhz as start up spectrum instead of 4.4 Mhz, the view in government is that the terms of trade will even out any perceived advantage to older service providers. Some licences held by those claiming "first mover" benefits will run out in a couple of years.
These firms will have pay for licences and spectrum afresh while new licences have more years to run while also paying for air waves beyond 6.2 Mhz. It is also felt that not charging for 1.8 Mhz was an important reason in estimates of loss of revenue in 2G spectrum allocations reaching an astronomical Rs 1.76 lakh crore. This could not be overlooked when the Centre revised policy and looked to shake off the baleful shadow of DMK leader A Raja's tenure. The national auditor's report on losses has played Prime Minister's Office in the line of fire as well for lack of oversight.
The government expects market competition and number portability to ensure reasonable tariff for subscribers despite the Centre's new policy of charging operators for additional spectrum and ushering an auction-based pricing.
With some operators speaking of telecom services costing more in view of added costs the new policy entails, the government did not rule out a more unfettered play of market forces but felt increase in subscriber costs need not be the obvious impact of new charges being levied on air waves that were previously not charged.
"There can be some fluctuations in rates but I think number portability and more open competition will mean rates remain reasonable. The customer will get low tariffs, the telecom sector can make reasonable profit and the government will get its revenues too," telecom minister Kapil Sibal said. The minister said not adopting the auction route had drawn flak and now that the government was saying all spectrum would be charged and new allocations would be auctioned, the question of cost was raised. "You can't have it both ways," he said, pointing out that the policy aimed to make the processes transparent.
The government believes charging for additional spectrum allotted to telecom service providers is essential to restore public faith in accountability and regulation of the sector. In the past no operator, either new or an early mover, paid for additional spectrum and this anomaly needed to be addressed. On the demand that new players be allowed 6.2 Mhz as start up spectrum instead of 4.4 Mhz, the view in government is that the terms of trade will even out any perceived advantage to older service providers. Some licences held by those claiming "first mover" benefits will run out in a couple of years.
These firms will have pay for licences and spectrum afresh while new licences have more years to run while also paying for air waves beyond 6.2 Mhz. It is also felt that not charging for 1.8 Mhz was an important reason in estimates of loss of revenue in 2G spectrum allocations reaching an astronomical Rs 1.76 lakh crore. This could not be overlooked when the Centre revised policy and looked to shake off the baleful shadow of DMK leader A Raja's tenure. The national auditor's report on losses has played Prime Minister's Office in the line of fire as well for lack of oversight.
