New Delhi: Can telecom companies seek additional spectrum at the old rates? This question is pending before the Department of Telecom (DoT) after two telecom service providers – Tata Teleservices and Reliance Communications (RCom) – recently approached the TDSAT (the Telecom Disputes Settlement and Appellate Tribunal) with pleas for additional spectrum at the old rates.
Both companies have sought 1.8 Mhz of additional spectrum since they claim to have fulfilled subscriber-linked criteria and, as per their individual licence conditions, are entitled to 1.8 Mhz more spectrum, over and above the 4.4 Mhz they already hold.
Their pleas come just days before an Empowered Group of Ministers (EGoM) headed by Finance Minister Pranab Mukherjee is scheduled to decide the base price for fresh 2G auctions. The Telecom Regulatory Authority of India (Trai)-proposed base price is about 10 times higher than the 2008 price at Rs 3,622 crore per Mhz of all-India spectrum.
But DoT may not entertain the pleas of these telcos. A source pointed out that in the light of the Supreme Court order of 2 February this year, which cancelled all 122 licences allotted by A Raja in 2008, there may be no room for spectrum allocation outside the auction process. This means that though their demand for spectrum may be valid as per their licence conditions, the telcos may not be allotted any spectrum because it is yet not clear whether auction is the only route for allocation of scarce natural resources.
The source said that though the DoT has not taken a firm view on the matter till now, it is very clear that another aspect also defeats the telcos’ purpose. “Not only can no spectrum be allotted outside the auction process, how can DoT give spectrum to anyone at a historical price? This was also struck down by the Surpeme Court”.
Last week, a report in Business Standard newspaper said that Tata Teleservices has approached telecom tribunal TDSAT seeking a direction to the government for allotment of additional airwaves for GSM services before the proposed spectrum auction. The report said Tata Tele has filed two petitions before TDSAT last week for the allocation of additional spectrum. It quoted sources to say that Tata Teleservices has requested the tribunal to direct DoT to first allot the additional spectrum of 1.8 Mhz before the proposed auction.
A service provider is authorised to get additional spectrum on achieving subscriber-linked milestones as mentioned under its existing telecom licence agreement.
The same report said that on 11 June, Reliance Communications (RCom) had also approached TDSAT seeking similar relief for GSM and CDMA spectrum. It had requested TDSAT to direct DoT to allocate or earmark the company 1.8 Mhz spectrum for GSM service and balance of CDMA spectrum as per its agreement with DoT before the auction. TDSAT had issued notice to the DoT asking it to file its reply within four weeks.
RCom in its petition said that as per its agreement with the Union of India, a telecom licence holder is authorised to get 4.4 Mhz spectrum to start its service and an additional 1.8 Mhz after achieving specified subscriber numbers.
The company said that it has achieved subscriber-linked criteria and hence is entitled to get additional spectrum of 1.8 Mhz.
The RCom petition had said that the government was now contemplating the allotment of the balance contractual GSM and CDMA spectrum on payment of an additional price. This is contrary to the terms of the licence agreement and also against RCom’s vested right to receive the balance of the contracted spectrum, its petition said.
The report further quotes the RCom petition as saying the company also alleged that DoT acted in a discriminatory manner and allocated spectrum to many operators free of cost even beyond the limit mentioned in the contract. It had also said that many operators have been allocated spectrum in low frequency bands compared to RCom which helped them save capital expenditure of over Rs 20,000 crore for providing telecom services.