DoT may seek explanation from telecom firms on excess spectrum

The Department of Telecommunications (DoT) is likely to approach existing operators such as Bharti Airtel, Vodafone Essar, BSNL and MTNL, who have been allotted 2G spectrum beyond the contracted limit of 6.2 MHz, and will seek explanation why they should not pay for the additional spectrum.

The move comes close on the heels of the recent CAG report which has said that allotment of 2G spectrum to the existing players beyond the contracted limit had caused a potential loss of about Rs37,000 crore to the government. This potential loss has been added by CAG to come out with the overall revenue loss of the government based on the 3G price which was pegged at Rs1,76,000 crore.

“We will soon seek explanation from the existing players who hold spectrum beyond the prescribed limits as to why they should not pay for it (additional spectrum). This will be one of the actions taken by the department on the issues raised in the CAG report,” a senior DoT official told Business Standard.

The Telecom Regulatory Authority of India, or Trai, had in its report a few months ago also recommended that incumbents should pay for spectrum which they have got beyond the contracted amount of 6.2 MHz at market rates. The recommendations of Trai are still pending with DoT.

Apart from the 122 unified access service (UAS) licences issued in 2008, DoT has also issued 22 licences to Idea Cellular, Aircel and Vodafone Essar (earlier Hutchison Essar) in 2006. DoT is likely to look into this aspect also as the licences issued in 2006 were also awarded on the rates fixed in 2001. However, the possible loss to the exechquer for giving out spectrum to these operators at the 2001 price has not been quantified by CAG.

“The audit report did cover the period between 2003-4 and 2009-10, however we focused on the new operators,” a top CAG official said.

A DoT official said: “We will look into this issue of price also”.

CAG, in its report, has revealed that 85 licences out of 122 new ones issued in 2008 did not satisfy the eligibility conditions prescribed by DoT.

The CAG report, which was tabled in Parliament on Tuesday, had identified some leading Indian companies which, it said, should not have been given UAS licences as they did not meet the various eligibility conditions earmarked by the department. These companies include like the Unitech group (Uninor), Loop Telecom(owned by the Essar group), STel, Swan Telecom, Datacom (now Videocon Telecommunications), Allianz Infratech (which has now merged with DB Etisalat).