DoT to impose one-time fee on a prospective basis

The telecom commission had decided to charge a one-time fee for the additional spectrum that goes beyond 6.2MHz, which would put some burden on older GSM operators. However, a recent report by The Economic Times reveals that DoT supposedly dropped its plans of one-time charge. Reportedly, according to an internal government note, the telecom ministry decided this, for operators like Bharti Airtel, Vodafone, Idea and BSNL for all second-generation airwaves they hold in excess of 6.2 MHz. DoT now plans to impose the fee on a prospective basis for the remaining period of the licences. Furthermore, the Union Cabinet has been asked to take the call.

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This new decision has put forth a relief to BSNL who can save up to Rs.1,000 crores, while Bharti and Airtel may save up to Rs. 8,000 crores. TRAI had suggested that Rs. 4,572 crore be charged for every MHz for additional holding over 6.2MHz spectrum. Incumbents were to go to the court, due to the one-time fee as it would force them to pay a gigantic sum. The telecom commission had stated that incumbents should either pay the administrated price set by TRAI or the price set in 2010 sale of 3G airwaves, whichever was higher in the specific region. According to an internal DoT note, the department plans to link the prospective fee to the prices in the upcoming 2G auctions following the cancellation of 122 licences by the SC.

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Reportedly, for example, “If one unit of 2G spectrum is sold for say Rs 2,000 crore on a pan-India basis, this works to Rs 100 crore per year, since bandwidth is allotted for a 20-year period. So, an incumbent mobile phone company whose licence is valid for five more years (2017) must pay up Rs 500 crore during this period for every unit of airwaves it holds nationally beyond the 6.2 MHz limit.”

Kapil Sibal had also announced new policy for telcos, and during the announcement, whether it is one-time or otherwise for the additional spectrum held by an operator would be considered later in the view of the Supreme Court judgment. If the one-time fee prospectively is approved by the Cabinet, then it would prove to benefit the operators.