No rethink on pricing 2G spectrum, Sibal tells operators

The Communications and IT Minister, Mr Kapil Sibal, has told telecom operators that he is compelled to take decisions in line with the suggestions made by the Telecom Commission and the telecom regulator.

Leaders of telecom companies including Mr Sunil Mittal, Chairman, Bharti Airtel, and Mr Anil Ambani, Chairman, Reliance Communications, met Mr Sibal on Tuesday to raise concerns with the new telecom policy initiatives including the proposed move to price 2G spectrum.

According to sources present in the meeting, Bharti Airtel, Vodafone and Idea Cellular wanted Mr Sibal to rethink on pricing 2G spectrum with retrospective effect.

The Telecom Commission had suggested that operators should be asked to pay for spectrum above 4.4 Mhz.

The panel had proposed that the price of spectrum used by the operators until now should be based on the price paid for 3G airwaves in 2010 while future pricing should be based on a new round of auction to be held later this year.

At today's meeting, the incumbent GSM players told Mr Sibal that it was unfair to charge a fee for spectrum with retrospective effect because they had got airwaves under the subscriber linked policy formulated by the BJP-led NDA Government. “These operators said that the industry will shut down if the Government imposes a fee with retrospective effect as none of them are making significant profits compared to the investments they have made,” said a Government official present in the meeting. In response to the incumbent players demand Reliance Communications representatives said that if incumbent operators are given any relaxation in this regard then DoT should accept its demand for pricing spectrum beyond 6.2 Mhz instead of 4.4 Mhz.

Licence Fee Concerns

The operators also raised other concerns including the proposal to levy a uniform licence fee of 8 per cent on all operators even though the TRAI had suggested 6 per cent. According to sources, the Minister deflected this issue by saying that since it was linked to overall Government revenues, this was in the domain of the Finance Ministry.

In addition, the operators expressed concerns over the proposal to bring infrastructure providers, including tower companies, under licensing regime. The operators said that such a move would be detrimental to the roll out objectives of the Government. “The Minister has agreed to review this proposal to impose licence fee on infrastructure firms,” said a source.

Relaxed M&A norms

Mr Sibal also agreed to bring in a relaxed M&A norms to enable consolidation in the sector. According to sources the proposal to impose a 5 per cent transfer charge on M&A deals may be scrapped.

“All the operators conveyed their views on various issues which are also a part of regulator Telecom Regulatory Authority of India's recommendations on spectrum pricing. The Minister will take a final call on telecom commission's suggestions soon,” DoT Secretary Mr R. Chandrasekhar said after the meeting today.

Trai meeting

The executives also met the TRAI Chairman later in the day to raise concerns about the recent regulation on customer protection. The regulation has in effect barred mobile companies from selling small value pre-paid cards in the market. The operators urged the TRAI to review this regulation and allow operators to offer monetary value on special top up vouchers.

tkt@thehindu.co.in

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