DoT sets up an Internal Committee based on TRAI recommendations

The concerns of telecom operators on the recent recommendations of TRAI will be referred to an Internal Committee of the Department of Telecommunications headed by its Member by the government.

TRAIIn a recent recommendation, TRAI has suggested that operators should pay an amount for the 2G spectrum that they hold in excess of 6.2MegaHerz which is equivalent to 3G spectrum.

This had given rise to two fighting camps among telecom service providers. One group is lead by Tata Teleservices and Reliance Communications, which is in favor of the recommendations, and the other group is led by Bharti Airtel and Vodafone who are against the recommendations.

The internal committee’s role will be to discuss issues which concern’s licenses, spectrum, mergers and acquisitions, allocation of spectrums, cost of spectrum and roll-out obligations, and other related issues which were discussed in the meeting. The government has decided that the Internal Committee will finalize the views on the issues and refer them to the Telecom Commission.

An increasing agreement in the industry related to removing curbs on mergers and acquisitions can be noticed. As of now, new operators are not allowed to go for mergers. There are several other clauses which make the merger difficult.

If the committee opines in favor of mergers, it will for sure will bring in a series of consolidation in the Indian market. At present 15 operators are providing mobile services. According to many analysts, the mobile services run by a handful of providers is not a financially healthy situation for the industry.

The decision was the outcome of a meeting which was held amongst the Telecom Minister A Raja with the representatives of Access Service Providers including COAI and AUSPI.MTNL and BSNL chiefs were also present at the meeting