How to Kill the Telecom Golden Goose
Few TRAI recommendations have received more reader attention than the most recent spectrum recommendations piece released April last week. While gathering unprecedented criticism and rightfully so – the recommendations fly in the face of what possibly could be the most progressive telecom regulator that enabled the fastest growing telecom market the world was glad to talk about. Coming from the tables of Indian TRAI, these recent recommendations seem like an anti-climax.
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What could have caused such a drastic turn around, which is not only threatening to bury a sunrise industry that has spent billions of dollars in the business over the last decade but also cause embarrassment and disillusionment to the stake holders in the sector? Firstly it is truly the most retrograde, thoughtless, in-hospitable and unnecessary line of recommendations a regulator could have made. But worse, it is even directly conflicting with what was ordered by Supreme Court.
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One might never get to what triggered an unnecessary overhaul – if that is what the regulator is attempting to do – but all that was needed was to set to auction the out –of- turn allotments of spectrum made in 2008 – based on a reserve price that was acceptable to all. There are other serious business issues to tackle – including M&A norms, spectrum sharing, farming, 700MHz auctioning - all of which could have been taken up with a more detailed consultation process much later. The arbitrary price points set up seemed to rock the cradle much too far with an attempt to redefine the entire telecom landscape in one stroke: as if things can be wiped clean off a slate!
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Could it be that the forecasted government deficit expected over the next couple of years in the face of a weak economy, demand a healthy sector be raised to the sacrificial altar? Other bleeding sectors such as mining and airlines have little sheen left to fleece. Telecom is still attracting investment and broadband was until now considered the next big growth zone. Could it be that arbitrary spectrum pricing is being arrived to best offset national economic deficit over a period of 5 - 7 years? Further, it is bizarre that without even defining spectrum trading, it is expected to be treated as collateral for securing bank credit. And the rationing of 5MHz in auction reminds one of the more recent television commercials where an operator is shown serving a meal in tea spoons.
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The DoT has done well to reject some of TRAIs requests including powers to award and retract licenses for potential MVNOs and reduction in foreign direct investment in tower sector. The industry hopes that wisdom will prevail within the Department and there should be no hesitation in rejecting these recommendations if it means to save the Telcos, financial and vendor community, thousands of jobs and millions of consumers.
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Sridhar T Pai | Contributing Analyst- Heavy Reading
Sridhar Pai runs Tonse Telecom, a Bengaluru-based telecom research and consulting house that is a research partner to Light Reading India.
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May 15, 2012 
