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Telecommunications Info-Tech - Regulatory Bodies & Rulings Auction of spectrum legally possible, says Finance Ministry
Pricing any spectrum above 4.4 MHz Fixed fee of Rs 378 crore for additional 1.8 MHz Fee per Mhz for that above 6.2 MHz, for existing and new players Thomas K. Thomas
New Delhi, Feb. 16 The Union Finance Ministry has told the Department of Telecom that allocating spectrum through an auction process was legally possible. The opinion of the Finance Ministry is in contrast to the stand taken by the Communication Ministry, which had earlier ruled out auction on the grounds that it was illegal. Finance Ministry’s reservation against allocating spectrum at a price fixed in 2003 was expressed during a recent meeting between the Finance Secretary, Dr D. Subba Rao, and Mr Siddhartha Behura, Secretary, Department of Telecom. In the meeting, for the first time, DoT also admitted that auction was legally possible but it may not be a practical solution to the controversy. The Finance Ministry is in favour of auctioning spectrum to generate more revenues for the Government. However, DoT has so far resisted any attempt to change the existing subscriber-based allocation norms on the grounds that it would be unfair to the new entrants. “The licence norms state that DoT is contractually obliged to give start-up spectrum of 4.4 MHz. We have issued 120 letters of intent and if we go for an auction then it cannot be assured that all these operators get initial spectrum,” said a DoT official. However, sources in the Finance Ministry point out that the suggestion to auction spectrum was given even before the letters of intent were given to new operators. DoT has proposed an alternative scheme wherein any spectrum above 4.4 MHz will be priced. As per this plan, the initial frequency of 4.4 MHz will be given for an entry fee of Rs 1,650 crore to new players. An additional 1.8 MHz spectrum will be given for a fixed fee of Rs 378 crore. For spectrum above 6.2 MHz, DoT has proposed to impose a fee per Mhz for both existing and new players. This means that operators like Bharti Airtel, which has up to 10 MHz in some circles, will have to pay for radio waves above 6.2 Mhz or surrender it back to the Government. The exact fee for spectrum above 6.2 MHz will be decided later. DoT has also proposed to impose a separate spectrum annual usage charge based on the circle of operation rather than the existing quantum-based fee. This means that an operator in Delhi, which has 4.4 MHz of spectrum, will pay the same annual charge (8 per cent of the annual revenue) as paid by an operator who has 10 MHz. GSM industry sources said that the proposal was an attempt by DoT to back its earlier decision against an auction. GSM operators can now get spectrum up to 15 Mhz Battle for spectrum dominates telecom sector More Stories on : Telecommunications | Regulatory Bodies & Rulings
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