New telcos join hands, seek spectrum up to 6.2 MHz

The new telecom operators have joined hands and asked the government to consider allotting up to 6.2 MHz spectrum to them without any additional charge as is being done for old GSM players.

Terming the proposal to charge new telcos for additional spectrum beyond 4.4 MHz as "discriminatory", new operators such as Tatas, RCom (for foray into GSM services), Sistema- Shyam, Uninor and others have approached the Telecom Ministry saying it will impact their sustainability and scalability.

Trai has been mulling charging operators for additional 1.8 MHz (GSM)/2.5 MHz (CDMA) spectrum, beyond the start-up spectrum of 4.4 MHz/2.5 MHz respectively.

"We are deeply concerned about this proposal as we have contractual arrangement with the Government for allotment of 6.2 MHz against one-time entry fee and based on that we did our network, financial and marketing planning activities and decided the roll out plans," the operators said in a letter to Telecom Minister Kapil Sibal.

Hence, any change to the already existing contractual arrangements with regard to allocation of additional 1.8 MHz/2.5 MHz will be highly discriminatory, against the level playing field and likely to derail business plans, it added.

Citing various TDSAT rulings and views of DoT and regulator Trai at various times, the operators said 6.2/5 MHz is considered contractual minimum and optimal quantity of spectrum for pan-India GSM operations.

"Trai in its letter dated May 3, 2011 and reiterated on November 3, 2011 that no fees should be charged under the prevailing policy," the letter said.

"If new operators like us are now going to be burdened with additional payment for 1.8/2.5 MHz spectrum, it would impact our sustainability and scalability," the letter said.

The operators said such changes would be in violation of the present license conditions.

Saying that any changes to the contract were not legally tenable, the operators have asked the government to re-consider the proposal and seek legal opinion on the same, before passing any final decision.

"The valid legal contract cannot be unilaterally changed by one party especially when the proposal has huge financial implication to the other party. The principle natural justice requires the consultation with the party who is going to be financially adversely impacted, by the unilateral change in the license provision," the letter said.