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Trai to initiate consultation on spectrum issues, valuation methodology in 2019

Trai, in August this year, had recommended rules and prices for the next round of spectrum auction that included radiowaves for 5G mobile services and other bands.

Trai to initiate consultation on spectrum issues, valuation methodology in 2019

New Delhi: Telecom Regulatory Authority of India (Trai) will next year initiate an in-depth consultation on general principles related to spectrum including its valuation methodology, Chairman R S Sharma said Wednesday.

Sharma - who chaired a meeting with telcos including Vodafone Idea, Reliance Jio and Airtel on Wednesday to discuss issues to be prioritised for 2019 - said the upcoming consultation will not have any bearing on the past recommendations of Trai on the auction of radiowaves.

Trai, in August this year, had recommended rules and prices for the next round of spectrum auction that included radiowaves for 5G mobile services and other bands.

"We have received suggestions on spectrum-related issues, policy relating to spectrum auction, reserve price valuation methodology, spectrum leasing, surrendering, trading...All these things will be deliberated upon. We will bring out a consultation paper which will have all spectrum-related issues," Sharma told reporters here.

He noted that telecom companies had been of the view that valuation method being used for spectrum had certain "deficiencies" and "inconsistencies".

Trai will, hence, look at all aspects of spectrum including pricing, the manner in which it is valued, how often should auctions be held.

Issues pertaining to backhaul spectrum that augments signals between mobile towers and new spectrum bands for the purpose would also be part of the forthcoming consultation.

Other issues that will be taken up by the regulator next year include fiberisation, review of Universal Service Obligation Fund (USOF) and creation of broadband readiness index for States -- a concept enshrined in the National Digital Communications Policy.

With a view to boost fibre network in the country, the regulator will consider steps that can be taken to improve fixed line broadband, and mull new business models that can create fibre-only players.

"How do you ensure that fiberisation increases in the country? Can you ensure new business models that create only fibre players or netcos so they can provide fibre to other entities on a non-discriminatory manner, much like tower companies do today," Sharma said.

There may also be discussions with the states on issues related to Right of Way permission.

"The telecom operators were of the view that we can consult the states and see if there can be a model where states are encouraged to participate in fiberisation of the country," he said.

Regulatory framework for IPTV and re-designing of the USOF model may also be taken up next year.

"USOF currently has certain objectives. The question is whether in the changed reality situation we need to redefine the objective of USO Fund. So we will consult and provide our recommendations to the government," Sharma said.

The meeting was attended by senior officials of Vodafone Idea, Bharti Airtel, Reliance Jio as well as state-owned firms BSNL and MTNL.

The industry, which is not generating enough cash to even service loans, flagged issues around high levies and GST refunds during the meeting with Trai.

The industry has sought lowering of the applicable GST, currently at 18 percent for telecom services, and also raised concerns around refunds.

"We will not give any recommendations on that as there is already a framework for GST," Sharma said adding that the regulator has also already suggested cut in spectrum usage charges and licence fee.

The telecom sector has been bruised by falling tariffs, eroding profitability, and mounting debt in the face of stiff competition triggered by disruptive offerings of Reliance Jio, owned by Mukesh Ambani.

The industry has sought urgent relief measures entailing debt restructuring, cut in levies like licence fee and spectrum charges, and release of GST input tax credit locked up with the government.

Billionaire Kumar Mangalam Birla, who heads Vodafone-Idea - the new entity post merger of Vodafone India and Idea Cellular - met Telecom Minister Manoj Sinha and his department's top bureaucrat Aruna Sundararajan recently and raised concern over stress in the telecom sector.

Birla is said to have expressed concern over Rs 30,000 crore locked up on account of GST payment under 'reverse charge mechanism', and sought deferring of the payment schedule for spectrum.

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