'TRAI recos good; spectrum auction in Jan '14'

Telecom secretary MF Farooqui told CNBC-TV18 that the recommendations made by the Telecom Regulatory Authority of India (TRAI) are good as there was a need to bring in more realism to the reserve price. He hopes the telecom department will conduct spectrum auctions by Januray 2014.

Also Read: TRAI recos to be accepted despite DoT reservations: Expert Below is the verbatim transcript of his interview on CNBC-TV18 Q: What is your view on the recommendations by TRAI?
A: We recognize that the recommendations made by TRAI are a very good way forward. There was a need for bringing in more realism to the reserve price. We cannot forget what happened in November and March at the same time there are certain areas where the committee had sought for some clarity. It is always better to have very good clarity and then take the decision. Q: Are bureaucrats actually trying to save their back though everybody in the telecom commission is in favour of reduction in the reserve price? Given the way environment is, nobody really wants to take a chance and do they want everything to be on record and then go ahead and accept TRAI's recommendation?
A: You are presuming too many things. Generally, we welcome this and we would like to have clarity on the issues that have been raised by the committee and then eventually take a decision which is in the best interest of the sector.  Q: For CDMA spectrum, that is 800 Mhz band of spectrum the telecom commission – that is another issue on which TRAI's clarification has been sought. If they were to recommend a reserve price though TRAI has made it clear that it does not see any demand for this spectrum. Would the Department of Telecommunication (DoT) then look at a timeline or is it necessary that all categories of spectrum whether it is 800 Mhz or 900 Mhz or 1800 Mhz should be auctioned altogether?
A: We would also like 800 Mhz to be auctioned along with 1800 Mhz and 900 Mhz. We have asked for some further clarification from TRAI. Q: What is your sense within DoT and what is your personal sense? Do you feel there is demand for 800 MHz band of spectrum? For instance, company like Reliance Telecommunications or Tata Tele, I am not particularly sure how much of spectrum would they like to bid for, for 800 MHz band and for Sistema Shyam they just participated in the previous auction round. You have suggested at TRAI there are certain circles in which a price has been identified. Going forward I am reducing the reserve price, does it not create a very peculiar situation?
A: I did not say anything about the reserve price. You are just presuming that.

_PAGEBREAK_ Q: Is it possible that in the circles where a market determined price has already been discovered, it would remain the same and in others maybe TRAI's recommendations would factor?
A: I have said nothing because TRAI itself had said nothing on it. We have to wait for them. We have asked them to reconsider. Let us hear their view and in any case we are talking of liberalised spectrum. Going forward, we are thinking of many other changes, so why do we have to necessarily think of a spectrum being specifically linked to a particular technology. Let us wait for further recommendation from TRAI and then we will take a call. Q: As far as rationalisation of spectrum usage charge is concerned, TRAI has recommended that there should be a uniform spectrum usage charge and you have also indicated that as a sensible option. What would be a sensible timeline? What do you think should be the roadmap for implementing this, because that has been the key concern of the members of the telecom commission?
A: I would only like to spell out what are those principles which we want to keep in mind. The roadmap has to be derived from that and those principles would be, one, there maybe some legal or contractual obligation that the government or DoT might have entered into while giving the spectrum in the past and what is the legal implication of not keeping up to those obligations.
There may also be other cases where the obligation might have been actually for higher spectrum usage charges and supposing for making it uniform it is proposed to be brought down then it will have a revenue implication. How much is that revenue implication? I think these are the two concerns. We need to address them and I do recognise that over a period of time it is a good way to go for a uniform spectrum usage charge and it might be possible to devise away. Q: Simon Israel the chairman of SingTel which is one of the investors in the telecom sector in India indicated that probably they would be interested in sponsoring Bharti Airtel's M&A endeavors in the country and Bharti has on record said that they would like to be on of the leaders and would like to contribute to the consolidation of the telecom sector in India. They recently held a series of meetings with government officials and also with various ministers including the finance minister. Do you now see that with FDI cap having been increased to 100 percent, not just SingTel but maybe Vodafone would also see investments coming in from foreign investors?
A: Without talking about any specific company let me say that the whole purpose of increasing the FDI was to make sure that those who were not able to undertake expansion or not able to undertake the required investments because they had reached the cap or were about to reach the cap they are given more headroom.
Telecom has led India's growth story four-five years earlier. We think that this is again when the data picks up there will be another opportunity for the telecom sector to script yet another growth story for the country.