Airtel, Vodafone seek compensation from Centre for delay in spectrum allocation

Thomas K Thomas New Delhi | Updated on November 25, 2017


Operators incurring losses due to interest burden on money paid for airwaves

Telecom operators, including Airtel and Vodafone, have asked the Department of Telecom (DoT) to compensate them for the delay in allocation of spectrum won by them in the February auction. The operators said allocation has been delayed by more than six months, leading to a financial loss, owing to the interest burden on money paid to acquire the airwaves.

Airtel paid ₹5,525 crore for spectrum in Delhi, Kolkata and Mumbai in addition to ₹2,542 crore as bank guarantees. “The inordinate delay in allocation of spectrum has impacted business plans, whereby the expansion of existing networks as well as the rollout of new networks has been delayed. We are incurring an interest burden on the upfront amount paid to DoT without being able to utilise the spectrum for any commercial gain,” Airtel said in a letter to the DoT. The issue assumes urgency because the 20-year licences issued to these players expire in November. They need the fresh spectrum before that in order to migrate their networks on to the new frequency bands won in the auction.

Airtel said that the delay would impact 10.4 million subscribers in Delhi and 3.9 million users in Kolkata. “In the absence of an assignment letter, we are not able to import the equipment, leave aside reconfiguration and optimisation, which will require 6-12 months,” Airtel said.

The operator said telecom regulator TRAI had recommended that in case of a delay in allocation of spectrum beyond one month from the date of payment, telecom service providers should be compensated at State Bank of India prime lending rates for the amount paid.

Published on September 08, 2014

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