The Hindu Business Line : GSM players oppose one-time spectrum fee

New Delhi, July 17 GSM-based mobile operators including Bharti Airtel, Vodafone Essar and Idea Cellular have written to the Prime Minister, Dr Manmohan Singh, against the proposal to impose one-time fee on telecom companies with more than 6.2 Mhz spectrum.

While the Department of Telecom ha been mulling such a fee for some time, the proposal gained momentum after the Samajwadi Party leader, Mr Amar Singh, wrote to the Prime Minister that the Government should ask operators to pay Rs 1,312 crore for every Mhz they hold above the 6.2 Mhz mark.

Companies such as Bharti Airtel and Vodafone have been given as much as 12 Mhz in some circles, which means that these operators will have to cough up over Rs 10,000 crore if this proposal is accepted.

Letter to PM

Pushing their case to scrap the move through the Cellular Operators Association of India, the GSM players in their letter to the Prime Minister said, “It would be extremely improper, incorrect and legally untenable for the policies of the Government to be re-written with retrospective effect.”

Earlier Reliance Communications had written to the Government maintaining that the operators should be asked to surrender excess spectrum or pay for it. Mr Amar Singh had claimed that GSM operators were hoarding spectrum.

In response, COAI said, “We are deeply disappointed that such allegations are being made against the mobile sector that is widely hailed as the poster boy of economic reforms in India, even as Indian mobile operators, by global reckoning, make do with the lowest spectrum allocations, pay the highest taxes and offer the lowest tariffs in the world to their consumers. The spectrum has been allocated under the guidelines framed as per terms and conditions laid down under licence. There has been no unauthorised allocation, as alleged.”

In a 3-page letter to the Prime Minister, the COAI said that the cap of 6.2 Mhz was applicable only for start-up initial allocation to new operators. “The licence also prescribes that allocation of additional spectrum will be considered after ensuring optimal and efficient utilisation of already allocated spectrum as per guidelines / criteria prescribed from time to time. Further the contention that spectrum is being “hoarded” is completely baseless, mischievous and misplaced.”