Monday, August 20, 2012

TRAI was expected to facilitate the growth of the telecom industry

India’s telecom ‘regulator’, TRAI was expected to facilitate the growth of the telecom industry. While growth created history, TRAI’s excesses also succeeded in doing the same

The second case relates to the new set of proposals that TRAI has conjured up on spectrums and M&A. The proposals state that operators holding 2G spectrum over and above 6.2 MHz up to 8 MHz should pay a one-time additional charge, linked to the current prices of the 3G spectrum! Beyond 8 MHz, the price would be 1.3 times the current 3G price! The payments would be on a pro-rata basis; Bharti, Vodafone and BSNL hold 10 MHz spectrum in certain key circles, while Idea holds up to 8 MHz and the proposal would spell doom for their already dwindling profits. If you thought that that was enough to prove that TRAI was not “collaborating” with private operators, hold your conclusions – amazingly, Anil Ambani owned Reliance Communications is the only operator in the green, post the recommendations as it holds less than 6.2 MHz in all circles except Bihar. Similarly, R-Comm will also get top priority while getting additional spectrum as it is the first company to already possess start up spectrum. How would that matter? Mysteriously, TRAI has proposed top priority for operators with existing start up spectrums – this means that players like Tata Teleservices will face the barrel with no startup spectrum. This would also mean that new players, without any startup spectrum, are being told they possibly cannot get any spectrum. And one thought TRAI was supposed to provide a level playing field?

The argument that TRAI is working for the consumers, can be summarily dismissed as being nonsensical. Till 2007, there wasn’t even a formal provision in the Act for consumers’ complaints redressal. From unbelievably avoiding the implementation of ‘number portability’ to arbitrarily implementing pricing plans (When Tata Docomo’s per second pulse plan became famous, TRAI suddenly wanted to make per second billing mandatory for all mobile operators), TRAI has failed miserably in the critical job of being a model regulator. In the wake of advent of 3G and the near future 4G services in India, the need for a super regulator to monitor TRAI and other regulators deserves stronger consideration than what it has attracted in the past.


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