EGoM to take legal opinion on one-time spectrum fee

New Delhi: An Empowered Group of Ministers, headed by Finance Minister P Chidambaram, will seek legal opinion from Attorney General on its decision to charge around Rs 27,000 crore one-time spectrum fee from existing telecom operators.

“EGoM will take legal opinion on the decision taken for charging one-time fee for the spectrum that existing operators hold beyond the 4.4 Mhz threshold.[caption id=“attachment_484984” align=“alignleft” width=“380”]  Spectrum issue. Reuters[/caption]

“Also, it will inform AG the circumstances under which these decisions were taken to create level-playing in the industry,” a government official aware of the development said in New Delhi.

The EGoM on Monday decided to charge existing players for the airwaves that they were allocated beyond 4.4 Mhz in case of GSM mobile service providers, and above 2.5 Mhz spectrum in case of CDMA operators.

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The official said that EGoM has proposed that telecom companies should pay the amount in equal annual installments over a period of 10 years.

“The charges on telecom companies will be levied from the first day of the quarter preceding the date of decision taken by Cabinet. Suppose if Cabinet decides in October or November, then charges will be levied from 1st January,” the official said.

In this case, the government will be able to get only Rs 2,700 crore revenue from the one-time fee if spectrum is sold out at reserve price only.

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The one-time spectrum fee of Rs 27,290 crore includes the amount that will be charged with both GSM and CDMA technology based service providers for spectrum in 1800 Mhz band, being used for 2G GSM services, and 800 Mhz band which is used for tranmsitting signals for CDMA phones.

If the decision is approved, public sector companies will have to shell out around Rs 10,620 crore over a period of 10 years and private companies will have to pay Rs 16,670 crore.

“There are around 90 licences belonging to different companies that have spectrum up to 6.2 Mhz, out of which 54 licences hold spectrum beyond 6.2 Mhz.

“Around 64 licences have been given initial spectrum of 4.4 Mhz but for additional spectrum, they will have to pay teh market determined price,” the official said.

Similarly in case of CDMA, there are 33 licences that have spectrum up to 2.5 Mhz and 35 licences have spectrum beyond 2.5 Mhz, the official added.

“From now onwards, there can be no free spectrum that will be given to companies,” the official said.

The official said that decision on spectrum held by some companies beyond 4.4 Mhz in premium 900 Mhz band will be taken after EGoM decides on the reserve price for auction.

PTI