Commerce and Industry Minister Anand Sharma in a letter to Finance minister Pranab Mukherjee has slammed the TRAI recommendations on spectrum auction saying that this will have major implications on tariffs, According to ET.
He said that that the country can’t afford to have regulatory uncertainty in a sector as crucial as telecom, which has catalytic growth impact for the entire service industry. He suggested that the upcoming sale of airwaves should be done in a manner that balanced the interests of the consumer and industry.
With this he become the first cabinet minister to come out against the TRAI proposals. "This will surely limit the participation in auctions and have major implications on tariffs," he said.
Sharma said the reserve prices prescribed by TRAI for the auctions were nearly 70-80 times higher than those in developed countries.
In a letter written early this month Sharma said that accepting Trai's recommendations on refarming or redistributing airwaves in the 900 MHz band, largely held by incumbents, and substituting them with frequencies in the 1800 MHz band, when licences of mobile phone companies come up for renewal beginning 2014.
"I am given to understand that the 900 MHz spectrum, which is currently used in the delivery of GSM services, has been proposed for refarming and the existing licensees are being asked to migrate to a higher frequency band.
Clearly, this will have serious implications as huge investments in new infrastructure will be required while making the current investments of Rs 1 lakh crore redundant," Sharma wrote in his letter.