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Mobile operators may have to shell out $400 Mn
By siliconindia
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Tuesday, 15 July 2008, 23:30 IST
New Delhi: If mobile operators, including Bharti Airtel, Vodafone Essar and Idea Cellular want to continue enjoying their excess spectrum that is beyond the stipulated 6.2 Mhz in the license for cellular services (2G), they need to shell out at least Rs 1,600 crore ($400 million) each as one-time payment.
Making the move in line with the view of the Finance Ministry, which wanted higher revenues from spectrum allocation even for 2G services, the Department of Telecom on Monday held a meeting with industry representatives to discuss the proposal, which is supposed to do away with the process of allocating spectrum without any upfront fee. This means that an existing operator, such as Bharti, will have to pay for the additional 5.8 Mhz that it already holds in some circles, such as Delhi. While the GSM license does not mention spectrum beyond 6.2 Mhz, some of the operators, including Bharti Airtel, have been given up to 12 Mhz based on their subscriber numbers.
"While the Government has decided to auction spectrum for 3G mobile services, now it wants to put a price on 2G as well. This will ensure that operators use this finite resource efficiently. This will also ensure that the concept of free spectrum is done away with," said a DoT official adding that the proposals will be discussed with the industry and various experts before it is finalized.
Earlier, Chief Vigilance Commission, Amar Singh, MP and leader of the Samajwadi Party, Reliance Communication and some other new players had written to the Communications Ministry that operators holding more than 6.2 Mhz spectrum should either be asked to return it or pay for it.
Three options are being discussed according to an internal DoT note. One is to ask the operators to pay a flat fee of Rs 1,600 crore based on the price arrived at in 2001 during the fourth cellular bidding process. The other option is to ask the operators for Rs 375 crore/Mhz, in which case they will pay according to the quantum of spectrum they hold in each circle. The third option is to raise this amount by four times to account for the increase in the operator's revenues over the last four years.
