Govt mulls refund on surrendered spectrum

Will take a call soon on demand by some leading telcos.

The government is considering a demand from some leading Indian telecom operators for a refund of the entry fee paid on second generation (2G) spectrum if the operator surrenders the scarce radio frequency.

The government currently does not pay back the entry fee to any operator who returns the spectrum because it could not roll out the services. Nor is a refund given if an operator surrenders the spectrum following a merger with or acquisition of another telco having spectrum in the same service area.

Operators led by Idea Cellular had made a case for the refund at a meeting with Union Communications Minister A Raja on Wednesday. “Yes, the matter was raised by some operators. We will look into the issue and take a call,” said a senior official with the Department of Telecommunications (DoT).

A telecom operator who secures a unified access service licence (UASL) in one circle is entitled to 6.2 MHz of 2G spectrum. For a pan-India licence, an operator pays about Rs 1,650 crore.

The issue came to the fore a few months earlier. DoT had asked Idea Cellular to surrender six overlapping telecom licences, which it had got following its acquisition of B K Modi’s Spice Communications two years before. DoT also made clear there was no question of returning the Rs 800 crore which Idea had paid as the fee for the licence in these circles. The licences were for rolling out 2G services in Punjab, Karnataka, Andhra Pradesh, Delhi, Haryana and Maharashtra.

“Certainly, it is a good idea if some operators have valuable spectrum asset and want to return it to the government. The government can decide if all or part of the fee should be refunded,” said telecom analyst Mahesh Uppal.

Operators say the refund demand is legitimate, as the returned spectrum would address the problem of 2G scarcity. “While we have no spectrum, there are many operators who have either not rolled out any service or launched operations only in a very small measure. The government should encourage them to give back their spectrum, by refunding the spectrum fees," a leading GSM telecom operator said, on condition of anonymity.

However, some operators say a refund would be against the licence terms. “Many of the operators who are pushing for this are defaulters who have not followed their rollout obligations. Under the terms of the licence, the government has the right to take away their spectrum. Why should they be given a refund?” asked the CEO of a top CDMA operator.