Trai recommendations on reserve price is high:CII

New Delhi: Extending support to telecom industry`s plea to review Trai recommendations, industry body CII has said reserve price for spectrum auction is "extremely high" and would hurt overall national interest, inclusive growth and will be detrimental to the growth of the industry.

CII said it is of the view that at present juncture the auction of only 2G spectrum should be considered to comply with the Supreme Court`s decision. "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 said in a statement.

Telecom Regulatory Authority of India (Trai) has suggested a base price of Rs 3,622 crore for one megahertz (MHz). This is around 10 times higher than the price at which 2G licences were allocated in 2008 during the tenure of the then Telecom Minister A Raja.

CII, which has made recommendations to the Department of Telecommunications in this regard has said the Trai`s views on reserve price "do not appear to be based on realistic techno-economic principles". It added it was essential that spectrum be made available at a reasonable price to ensure mobile phone tariffs continue to be affordable for the socio-economic benefits and inclusive growth.

CII has suggested the spectrum auctions be appropriately designed to serve the overall national and societal interests. "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," it said.

The body also suggested that all available spectrum should be made open for upcoming auctions to avoid any artificial scarcity. "If necessary, some spectrum should be released from other existing users," it added.

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