Confederation of Indian Industry (CII) has said that at present juncture the auction of only 2G spectrum should be considered to comply with the Supreme Court’s decision.

TRAI recommendations on “Auction of Spectrum“ have been carefully considered by the National Committee on Telecom & Broadband of CII, which represents all major Telecom players of India.

The members unanimously feel that the reserve price for the auction of spectrum as recommended by TRAI is extremely high, which will hurt the overall national interests, inclusive growth and will be detrimental for the growth of the industry particularly the expansion of telecom and broadband services in the rural areas.

CII had made its recommendations to the Department of Telecommunications in this regard. It has recommended that the amount of reserve price for 2G spectrum auctions as recommended by TRAI do not appear to be based on realistic techno-economic principles. It is also extremely high as compared to TRAI’s own recommendations made earlier in February 2011, which were re-confirmed by TRAI in November 2011.

CII has suggested that the tariffs should continue to be affordable for the socio-economic benefits & inclusive growth, for which it is essential that the spectrum should be made available at a reasonable price. It has been requested that the recent Indian market experience on severe financial constraints being faced by the industry needs to be kept in view.

CII has recommended that the spectrum auctions should be appropriately designed to serve the overall national & societal interests and to encourage faster rural roll out by operators. The Industry strongly feels that once the full market value for spectrum has been extracted by the Government through an open market (auction), there is no justification for any further roll out obligations. Therefore no further roll out obligations should be specified and the market forces should determine the rollouts and there is no need for levying rollout conditions, as has been recommended by TRAI.

CII has also recommended that all available amount of spectrum should be made open for upcoming auctions to avoid any artificial scarcity. If necessary, some spectrum should be released from other existing users.

Considering the current financial constraints of the telecom industry, the TRAI recommendation on deferred payment seems appropriate and may be accepted by the Government, the CII release said.