The Hindu Business Line : Mobile operators to pay for excess 2G spectrum

The Communication and IT Minister, Mr A. Raja, along with the Minister of State, Mr Jyotiraditya Scindia, at the release of the first-day cover of the new logo of India Post in the Capital on Tuesday.

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New Delhi, Sept. 23 Mobile operators, including Bharti Airtel, Vodafone Essar and Idea Cellular, may have to cough up as much as Rs 4,000 crore each for having spectrum beyond 6.2 Mhz for offering cellular services (2G).

The one-time fee is being imposed on the grounds that the cellular licence does not mention spectrum allocation beyond 6.2 Mhz in each circle even as some of the operators have been given up to 12 Mhz in some areas. The proposed fee is being seen as a way to recover the value for the excess spectrum.

The Communications and IT Minister, Mr A. Raja, on Tuesday said that the issue was being discussed with the Finance Ministry and a decision on the exact quantum of the fee and the method of calculation will be announced by October.

According to a proposal being worked out by the Department of Telecom, mobile operators may have to cough up as much as Rs 80 crore for each unit of spectrum bandwidth beyond 6.2 Mhz in Metros and Circle A States, Rs 40 crore in Circle B and Rs 20 crore in Circle C.

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 subscriber numbers. If this proposal is accepted, then an operator such as Bharti may have to pay a total of Rs 1,600 crore.

There is, however, another proposal to charge a flat fee of Rs 266 crore for each unit of spectrum irrespective of the area. If this option is accepted, then Bharti will be forced to pay over Rs 4,000 crore for its pan-Indian spectrum.

Other players such as Vodafone and Idea will have to pay lower amounts since they do not own as much spectrum as Bharti Airtel does.

The Samajwadi Party leader, Mr Amar Singh, had also suggested a formula whereby existing GSM players would have had to pay Rs 1,312 crore for each unit of spectrum beyond 6.2 Mhz. This would take the bill to over Rs 10,000 crore for each player.

However, DoT is not in favour of this scheme as it will be difficult for operators to pay such a high amount. DoT has also suggested an across-the-board increase in annual spectrum charges paid by the operators as a percentage of their revenues. Currently, operators pay up to 4 per cent of their revenues depending on the quantum of spectrum they hold. DoT has proposed to increase the rate by another one per cent.