Charge one-time fee on extra spectrum on prospective basis: DoT

In what could come as a relief to incumbent operators like Bharti Airtel and Vodafone, the government is considering charging a one-time fee for excess spectrum on a prospective basis.

"Current prices per MHz recommended by Trai may not reflect the true market price. Hence, the price is to be determined by auction," a presentation made to Union Ministers by the Department of Telecommunications (DoT) said.

It said one of the recommendations was that the spectrum already allotted from 4.4 to 6.2 MHz and from 2.5 to 5 MHz in GSM and CDMA bands, respectively, may be charged prospectively.

Spectrum already allotted beyond 6.2 MHz/5 MHz in GSM/ CDMA bands may be charged prospectively, it added.

Earlier, the government was looking at charging a one-time fee for the extra spectrum beyond the contracted limit of 6.2 MHz from the date of allocation. This would have put a huge financial burden on the old GSM operators.

Leading telecom operators, including Bharti, Vodafone and Idea, have been opposing this saying there was no such clause in the telecom licences under which this type of levy can be imposed.

Moreover, the operators have claimed that allotment of spectrum to them was as per the policy of the day.

The one-time fee was recommended by the Telecom Regulatory Authority of India (Trai) and the amount was computed by experts, the presentation said.

The regulator had recommended that each MHz of additional spectrum, after the 6.2 MHz limit held by operators should cost a one-time Rs 4,571.87 crore (all-India).

Trai had also suggested that the one-time fee would vary from circle to circle and the operators would have to pay only for those circles where they hold extra spectrum.

The operators, on the other hand, had supported an auction route to determine one-time fee for spectrum beyond 6.2 MHz.