The Hindu Business Line : Mobile cos may be charged for excess 2G spectrum

New Delhi, July 14 Mobile operators, including Bharti Airtel, Vodafone Essar and Idea Cellular, may have to cough up at least Rs 1,600 crore each, as one-time payment for having spectrum beyond the stipulated 6.2 Mhz in the licence for cellular services (2G).

The Department of Telecom on Monday held a meeting with industry representatives to discuss the proposal whereby operators may be asked to pay on Mhz basis for spectrum held beyond what was promised in the licence agreement. While the GSM licence does not mention spectrum beyond 6.2 Mhz, some of the operators, including Bharti Airtel, have been given up to 12 Mhz based on their subscriber numbers.

The new formula being suggested by DoT will do away with the process of allocating spectrum without any upfront fee. This means that an existing operator, such as Bharti, will have to pay for the additional 5.8 Mhz that it already holds in some circles, such as Delhi.

The DoT move is in line with the view of the Finance Ministry, which wanted higher revenues from spectrum allocation even for 2G services. “While the Government has decided to auction spectrum for 3G mobile services, now it wants to put a price on 2G as well. This will ensure that operators use this finite resource efficiently. This will also ensure that the concept of free spectrum is done away with,” said a DoT official adding that the proposals will be discussed with the industry and various experts before it is finalised.

Earlier, the Chief Vigilance Commission had questioned DoT for allocating spectrum beyond 6.2 MHz to GSM players. Recently, Mr Amar Singh, MP and leader of the Samajwadi Party, had also written to the Prime Minister seeking a fee on all operators who had spectrum beyond what was mentioned in the licence. Reliance Communication and some of the new players had also written to the Communications Ministry that operators holding more than 6.2 Mhz spectrum should either be asked to return it or pay for it.

According to an internal DoT note, one of the options being discussed is to ask the operators to pay a flat fee of Rs 1,600 crore based on the price arrived at in 2001 during the fourth cellular bidding process. The other option is to ask the operators for Rs 375 crore/Mhz, in which case they will pay according to the quantum of spectrum they hold in each circle. The third option is to raise this amount by four times to account for the increase in the operator’s revenues over the last four years.

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