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— Kamal Narang

Connecting rural: (from left) Dr Amit Mita, Secretary General, FICCI, Mr Jyotiraditya M. Scindia, Minister of State for Communication & Information Technology, Mr A. Raja, Minister for Communications & Information Technology, and Mr Rajan Bharti Mittal, Vice-Chairman and Managing Director, Bharti Enterprises, at ‘India Telecom 2008 — Connecting Rural India’, in the Capital on Tuesday.

Our Bureau

New Delhi, Nov. 4 Existing mobile operators, including Bharti Airtel and Vodafone, will have to pay more for spectrum. In a bid to generate additional revenues for the Government from 2G spectrum, the Communication and IT Minister, Mr A. Raja, on Monday discussed a number of proposals with the Prime Minister, Dr Manmohan Singh, including a one-time fee on operators with more than 6.2 Mhz radio frequency.

The Ministry has also decided that operators with more than 8 Mhz spectrum will now have to pay an additional 2 per cent of their revenues to the Government annually. Those with less than 8 Mhz will have to pay one per cent more than what they already give to the Government as spectrum charges. Currently, the maximum spectrum charge being paid by mobile operators is four per cent of their annual revenue. This will now go up to six per cent.

According to top Government sources, the proposals have been finalised by Mr Raja after meeting the Prime Minister today. The Finance Minister, Mr P. Chidambaram, was also present at the meeting.

The proposal to impose a one-time fee has been in the pipeline for more than three months with the Department of Telecom looking at various methods to impose the levy. The Samajwadi Party General Secretary, Mr Amar Singh, had also suggested a levy on existing operators on the grounds that the mobile licence did not specify allocation beyond 6.2 Mhz. According to sources, this fee is expected to fetch the Government in excess of Rs 5,000 crore.

The DoT had been criticised by market analysts for having lost out on an opportunity to earn revenues for the Government by not auctioning 2G spectrum. This was further highlighted when the new players – Unitech and Swan – sold a stake in their company for more than triple the amount they had paid to the Government for acquiring the spectrum.

The biggest impact of these decisions, however, will be on the existing GSM players such as Bharti Airtel and Vodafone, which have up to 10 Mhz spectrum in some circles. Bharti may have to pay more than Rs 1,000 crore to the Government after these policies are announced.

More Stories on : Telecommunications | Policy | Bharti Tele-Ventures Ltd

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