Guess most of the Telecom Analysts missed the TRAI Open House Discussion on Telecom Spectrum Auction & Pricing event held in New Delhi late last month. However, here is what we are picking up from our interactions with Analysts who were in the meeting.
There was Visible Opposition from some quarters (primarily CDMA operators and consumer groups) over the reduction of Spectrum Prices. However, analyzing the underlying tone of TRAI officials we understand that TRAI is inclined towards a significant reduction in reserve price. TRAI chairman repeatedly referred to the precarious economic situation as a context to set realistic reserve prices, and also explained that small (10-20%) reductions in reserve price in multiple steps will do more harm than good.
TRAI is likely to continue to support refarming of 900MHz. But in our opinion, this is no longer relevant since all spectrum will need to be bought at market price by incumbents (i.e., refarming is being replaced by repricing).
E-GSM Band TRAI suo moto came up with issues on ‘refarming’ a portion of the 800MHz CDMA spectrum into GSM. This could be positive for GSM operators if implemented (more spectrum supply).
TRAI appeared to be in favour of allowing spectrum trading [as recommended by us], which will further improve the overall financial situation for the sector. We suspect implementation will take a while as we recommend TRAI to call for a detailed paper on the same.
A gradual move towards uniform spectrum usage charges is likely, though the Chairman warned against any sudden disruptive changes in this environment.
All these measures would be be positive for the Telecom industry as the dynamics of the Game have changed with the Scam Ridden, Paralyzed Congress Led UPA Government of India on Ventilator support just taking casual Timepass approach towards Governance and totally messing the Economy.