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Seal on spectrum levy

New Delhi, Nov. 8: The Union cabinet today decided to charge a one-time fee from existing telecom operators for holding more than 4.4 megahertz (MHz) of GSM spectrum based on prices discovered through an auction starting next week.

The levy, which could fetch the government as much as Rs 30,927 crore, will hit Bharti and Vodafone as well as the two state-run carriers — BSNL and MTNL.

Licensees will also have the option to surrender spectrum beyond 4.4MHz if they do not want to pay the fee. This fee can be paid in one go or in maximum 10 monthly instalments at 9.75 per cent interest.

The cabinet also decided that firms that acquire an existing telecom operator that had paid a low price for spectrum must match the price to be determined at the auction by paying the difference to the government.

Finance minister P. Chidambaram said while the price discovered in the auction beginning November 12 would apply to incumbent GSM operators, the department of telecom (DoT) will work out the fee for CDMA carriers as there are no bidders for the CDMA auction now.

“On the CDMA issue, we will come back to the cabinet because there is no auction discovered price now, but that does not mean they can get away without paying a price,” telecom minister Kapil Sibal said. This levy will be applicable to Reliance Communications and Tata Teleservices.

Operators have opposed this fee as they feel it will affect their profitability. Bharti Airtel today warned that operators will need to raise tariffs as margins are hurting at the current rate itself.

The cabinet also allowed the government to charge incumbent GSM operators such as Bharti, Vodafone, Idea and BSNL an additional one-time fee retrospectively for all 2G spectrum they hold beyond 6.2 MHz between July 2008 and December 2012.

This is expected to fetch the government a minimum of Rs 4,063 crore.

Meanwhile, the cabinet has also cleared a proposal by a Chidambaram-headed inter-ministerial panel to allow mobile phone operators to share spectrum.

Tata Teleservices

Tata Teleservices is in a position to launch GSM services in Delhi as the cabinet today cleared the proposal to give start-up airwaves to the company at no additional charge, subject to availability after the auctions that start next week.

SC on allocation

The Supreme Court today indicated that it would not brook any reduction in the quantum of spectrum allocation by the Centre through the bidding process.

“Whatever spectrum allocation was made to the 122 licensees should be part of the auction. It is as simple as that,” it said.

USO fund

The government today approved a change in the funding arrangement for schemes under the Universal Service Obligation Fund, including rolling out of a national network for broadband services.

 
 
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