Adding to the woes of telecom operators, the Finance Ministry has asked the telecom department to examine the possibility of collecting 35 per cent of the final bid amount quoted by the operators in the spectrum auction due in February up front. The move is aimed at increasing the revenue accruing to the exchequer this fiscal year.

The Department of Telecom had proposed to collect between 25 and 33 per cent for different frequency bands.

According to the decision taken by the Telecom Commission, operators who win 1800 MHz spectrum need to pay 33 per cent of the bid amount up front and the balance in ten years. Those who win 900 MHz spectrum need to pay 25 per cent up front.

Auctions held last year had the same payment schedule.

Pressure on operators This will, however, put pressure on the telecom operators as they are already reeling under a huge debt burden.

DoT officials said that it was unlikely the Department would accept the Finance Ministry’s proposal. “The Cabinet has already approved the payment schedule proposed by the Telecom Commission. It would be very difficult to change it now,” said a DoT official.

Operators unhappy The operators are unhappy with the reserve price fixed by the Cabinet. “The reserve prices for the proposed auction of spectrum in the 900 MHz band in 18 service areas have been increased by 32.5 percent over the reserve prices recommended by TRAI (Telecom Regulatory Authority of India,” GSM body COAI conveyed to Communication and IT Minister Ravi Shankar Prasad in a letter.

“We would like to submit that the reserve prices for the 900 MHz band recommended by TRAI were already too high, and a further escalation by 32.5 percent is completely unreasonable. Across all 18 circles where 900 MHz auction is proposed, this translates into a steep increase of ₹4,880 crore for 5 MHz of spectrum,” said the letter written by COAI Director General Rajan S Mathews.

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