Telcos get big spectrum bill; may fight it

The government has finally sent notices to telecom operators (telcos) asking them to pay for holding excess spectrum beyond the prescribed / contractual limit.

The notice says telcos that are not interested in paying can surrender the excess spectrum. If they pay up, the government would earn a whopping Rs24,000 crore.

Bharti Airtel has been asked to pay Rs5,201.24 crore and Vodafone Rs3,599.40 crore. Idea Cellular, BSNL and Reliance are among others who have been also asked to pay Rs1,882 crore, Rs6,912 crore and Rs173.47 crore respectively.

Telcos have been given ten days to comply. But they are considering taking legal action.

"They will approach the TDSAT (Telecom Dispute Settlement Appellate Tribunal) in a few days to challenge the notice. This is a violation of the licence agreement negotiated between the operators and the government earlier. The possible Rs24,000 crore drain will increase the financial instability of the telecom sector,\" said Rajan Mathews, director-general of the Cellular Operators' Association of India or COAI.

But the government maintains that the move will level the playing field for both old and new telcos.

GSM operators holding more than 6.2 MHz of spectrum will have to pay a retroactive fee for airwaves from July 2008 to December 2012. And for the period starting January 1, they will have to pay the fee based on the price determined through the auction held in November.

Mathews said the government may well float a proposal to pay the fee in installments, like in the case of the 1800 MHz spectrum auction. “We will review any such proposal. However, Wednesday's move is likely to have a far-reaching impact on telcos' participation in the upcoming GSM auction, as it will be a severe drain on their financials."

The government has finally sent notices to telecom operators (telcos) asking them to pay for holding excess spectrum beyond the prescribed / contractual limit.
The notice says telcos that are not interested in paying can surrender the excess spectrum. If they pay up, the government would earn a whopping Rs24,000 crore.

Bharti Airtel has been asked to pay Rs5,201.24 crore and Vodafone Rs3,599.40 crore. Idea Cellular, BSNL and Reliance are among others who have been also asked to pay Rs1,882 crore, Rs6,912 crore and Rs173.47 crore respectively.

Telcos have been given ten days to comply. But they are considering taking legal action.

\"They will approach the TDSAT (Telecom Dispute Settlement Appellate Tribunal) in a few days to challenge the notice. This is a violation of the licence agreement negotiated between the operators and the government earlier. The possible Rs24,000 crore drain will increase the financial instability of the telecom sector,\" said Rajan Mathews, director-general of the Cellular Operators' Association of India or COAI.

But the government maintains that the move will level the playing field for both old and new telcos.

GSM operators holding more than 6.2 MHz of spectrum will have to pay a retroactive fee for airwaves from July 2008 to December 2012. And for the period starting January 1, they will have to pay the fee based on the price determined through the auction held in November.

Mathews said the government may well float a proposal to pay the fee in installments, like in the case of the 1800 MHz spectrum auction. “We will review any such proposal. However, Wednesday's move is likely to have a far-reaching impact on telcos' participation in the upcoming GSM auction, as it will be a severe drain on their financials."