In a war of words between two key wings of the government, the telecom secretary has snubbed his counterpart at the finance ministry for picking faults in a note to an inter-ministerial panel which will decide on the reserve price for an upcoming auction of airwaves.
In a letter dated December 5, Rakesh Garg, the telecom ministry's top bureaucrat, cited established procedures while rejecting finance secretary Rajiv Mehrishi's views that the former needs to submit to the inter-ministerial panel the Department of Telecommunications' views — not that of its internal panel — on the reserve price suggested by the telecom regulator.
The inter-ministerial panel — the Telecom Commission (TC), of which both officials are members — is the highest decision-making body on matters related to telecommunications.
It is scheduled to meet on Monday to decide on spectrum pricing for auctions tentatively scheduled for February 2015.
An agenda note for the meeting was recently sent to the TC by DoT, to which Mehrishi raised objections in a December 4 letter to Garg. ET has seen both letters and the agenda note.
In his December 5 response, Garg said only the views of an internal DoT committee can be submitted vis-a-vis the Telecom Regulatory Authority of India's (Trai) proposals to the TC, and not that of the telecom department.
"The views of the DoT on policy matters can be crystallised only with the approval of the (telecom) minister and the minister's views would depend on the recommendations made by the Telecom Commission," Garg wrote. Garg's reasoning is that the Telecom Commission — which has the secretaries of finance, commerce, Planning Commission and telecom as members — is the highest decision-making body for the telecom department.
That means DoT's views depend on the commission's decision. Quoting a Cabinet resolution, the telecom secretary has said: "It is the role of the Telecom Commission to make recommendations on policy matters to the minister of communications."
In his December 4 letter to Garg, Mehrishi had pointed out that in the agenda note sent to the commission, the telecom department's views weren't mentioned. "There is a Trai recommendation and there is (a) report of the DoT committee. Where the management of the DoT stands vis-a-vis these two recommendations is not known," Mehrishi wrote.
According to him the Telecom Commission should be asked to decide on the proposal or recommendations of DoT rather than being given only the report of a DoT committee.
He added that the internal panel of DoT can advise the department but the TC needs the views of the department.
According to the agenda of its meeting, the Telecom Commission has to take a call on what reserve price should the government fix for the 2G airwaves in the 800Mhz, 900Mhz and the 1800Mhz bands.
At Rs 2,138 crore per Mhz, Trai in October suggested a 10% higher starting price for spectrum in the 1,800Mhz band compared with the last round, mostly owing to increasing mobile data consumption. It had further suggested Rs 3,004 crore per Mhz for 900Mhz, a premium band given the higher propagation characteristics thus requiring lesser capital expenditure.
According to recent reports, the internal DoT committee has suggested a more than 10% increase in the price of both bands. For the 800Mhz band, typically used by CDMA operators, the telecom regulator had suggested a base price of Rs 3,104 crore.
The DoT committee has proposed to increase that to Rs 3,646 crore, saying that given the potential of mobile data growth in densely populated metros and category A circles, the reserve price should not be 80% of the valuation as fixed by the regulator, but the full valuation.
"Service providers compete more fiercely for these categories given their market potential," the committee has explained
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