New Delhi:Telecom companies are stunned with the recommendations of Telecom Regulatory Authority of India (TRAI). Country’s second biggest mobile company Vodafone India had already said that if these recommendations are implemented, call rate hike is inevitable.

Following that, leading telecom operator Vodafone India on Tuesday raised its call rates by a steep 20 percent in Mumbai circle.

Rankled by TRAI's recommendations for 2G spectrum auctions, telecom companies on Wednesday made a joint pitch to top government functionaries, including Home Minister P Chidambaram and Finance Minister Pranab Mukherjee, for not accepting the "catastrophic" recipe of the industry watchdog.
    
Bharti Airtel Chairman Sunil Mittal, Vodafone Chief Executive Vittorio Colao, Idea Cellular Chairman Kumar Mangalam Birla and Telenor CEO Jon Fredrik Baksaas first made their case with Chidambram and Mukhejree and then followed it up with meetings with Planning Commission Deputy Chairman Montek Singh Ahluwalia and Telecom Minister Kapil Sibal.
    
They also met Pulok Chatterji, Principal Secretary in the Prime Ministers Office and possibly also Commerce Minister Anand Sharma besides a host of top bureaucrats, including secretaries to the department of telecom and commerce.
    
"This has been the most destructive period of regulatory environment I have seen in 16 years," Mittal said saying Telecom Regulatory Authority of India's (TRAI) recommendations will be "catastrophic" for the entire telecom sector.
    
Baksaas said the auction policy should be catalyst for "affordability, competition and investments" rather than leading to tariff hikes as would be case with TRAI setting a very high base price for the auction.
    
"If the decision are taken in interest of the industry, they (TRAI recommendations) have to be changed. I think the current recommendations will kill the industry," Birla said.
    
TRAI has suggested a base price of Rs 3,622 crore for one megahertz (MHz) for pan-India spectrum, which is around 10 times higher than the price at which 2G licenses bundled with 4.4 MHz spectrum were allocated in 2008 under the then Telecom Minister A Raja.

According to Trai, a minimum of 5 Mhz spectrum should be allotted, which means that pan-India airwaves in 1800 MHz band will cost Rs 18,000 crore.
    
"We presented our case to leadership and senior ministers in the government... this industry is vital for the nation and the recommendations of TRAI could spell a death knell for the industry," Mittal told reporters here.
    
The objective of the meeting was to bring to the government's attention the "disastrous" impact of the recommendations will have on the ability of operators to continue their operations.
    
Asked if Idea will participate in the forthcoming 2G auction, Birla said: "I don't think it makes sense to participate in the an auction for anyone at these prices."
    
"Subscriber will definitely pay much higher tariff if this is the kind of reserve price (accepted by the government)," he said.
    
On tariff hike, Mittal said the country's leadership wants affordable tariff. "Recommendations (of TRAI) fly on the face of that aspiration of the government to give affordable tariff."
   
Telenor Group President and CEO Jon Fredrik Baksaas said the government alone carries political responsibility and therefore the final say on policy.
   
"We urge the Indian Government to take its rightful political initiative now. This is the time to ensure that the policy made for license auctions allows affordability, competition and investments to remain in India," he added.
    
Asked about government's response, Birla said, "I think government has said that they are examining the issue thoroughly before giving go ahead to any decision."
    
On probable tariff hike if the recommendations are accepted, Birla said subscribers will definitely pay much higher tariff if this kind of reserve price comes around.
   
"Where is the question, (if) there is no industry, there is no consumer, everything goes hand in hand," Mittal said.

(JPN/Agencies)

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