The Hindu Business Line : Spectrum: S Tel ready to offer addl revenue share

In a letter to the Prime Minister, Dr Manmohan Singh, on Monday, S Tel Ltd offered to pay the Government an additional share of its prospective revenue, to the extent of Rs 6,000 crore over ten years, over and above the existing spectrum charges based on revenue share.

S Tel, which has applied for telecom licences in all 22 service areas, is the first new entrant to stick its oar into the ongoing tussle between the Government and GSM telecom operators over the Telecom Engineering Centre’s recent recommendations for new spectrum allocation norms.

The company is promoted by Skycity Foundations and Mauritius-based Telecom Investments and says it is in talks with a European telecom conglomerate to acquire a 49 per cent stake in the company.

In its letter to the Prime Minister, S Tel says it totally accepts the new recommendations, which include a steep hike in the subscriber base criteria for spectrum allocation. “S Tel commits to demonstrate the spectrum efficiency as per TEC’s recommendations by rolling out services in all the service areas in a period of six months…If we fail in any of the above commitments, S Tel is willing to surrender the spectrum allocated back to the DoT,” said the letter. S Tel believes that its move to voluntarily pay an additional revenue share for what it says is “a national asset and a scarce resource” being allocated “at a hugely concessional rate” will bring into effect a prioritisation model.

According to S Tel, this model will generate additional revenue of Rs 50,000 crore over the next ten years to the Government.