Hoping to create a level-playing field for both old and new mobile service providers, the Union cabinet on Thursday ratified the empowered group of ministers’ (EGoM’s) decision to levy a one-time fee for spectrum beyond 4.4 MHz at an auction-determined price.
According to the department of telecommunications (DoT), the move could net around Rs31,000 crore.
Finance minister P Chidambaram said GSM operators will be asked to pay for any spectrum beyond 4.4 MHz they hold at an auction-determined price. CDMA players would pay for extra spectrum beyond 2.5 MHz for the remaining validity of their permits. For spectrum beyond 6.2 MHz, a one-time charge would be levied retrospectively from July 2008. No one-time charge shall be levied for spectrum up to 4.4 MHz.
Mobile majors such as Bharti Airtel and Vodafone that already have spectrum beyond 4.4 MHz are expected to bear the brunt of the government’s decision.
Rajan Mathews, director-general of the Cellular Operators Association of India (COAI), said the decision will pressure the financials of the companies concerned. Agreed Bharat Bhargava, telecom partner, Ernst & Young. It is highly likely that the tariffs will go up soon, he said.
The COAI, Mathews said, is mulling legal action against the government.