Telcos may gain as DoT is recalculating one-time spectrum fee

Apr 20 2014, 17:12 IST
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SummaryThe bid got tepid response as the base price was considered high.

Old telecom operators are likely to get some relief in one-time spectrum charges, which is estimated at Rs 23,197 crore at present, as the DoT is re-calculating rates afresh based on February auction price.

"There will be a revision in rates of four circles- Delhi, Mumbai, Karnataka and Rajasthan- for 1800 Mhz and in three metros where auction for 900 Mhz band were held in February. Rest will remain the same," a DoT official told PTI.

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"The process has started. I cannot share exact time when the notice will be send but possibly within a month," the official said.

The one spectrum fee is the charge operators were asked to pay for holding additional spectrum. In 2008, telecom firms were given 4.4 MHz spectrum along with licence for Rs 1,658 crore for pan-India operations. Most of the operators were allocated additional spectrum without charing upfront charges.

The government in 2012 had decided that operators should pay for holding spectrum above 6.2 MHz retrospectively, from July 2008 to January 1, 2013 based on market determined price decided in auction.

The DoT had raised a total demand of Rs 23,197 crore from telecom operators, who were issue licences in 2008 (old telecom operators). The amount was arrived at on the basis of floor price fixed for November, 2012 auction. The bid got tepid response as the base price was considered high.

As per this calculation, state-owned BSNL had to pay around Rs 6,912 crore, Bharti Airtel Rs 5,201 crore, Vodafone Rs 3,599 crore, MTNL Rs 3,205 crore, Idea Cellular Rs 2,113 crore, Aircel Rs 1,365 crore, Loop Mobile Rs 606 crore and Reliance Communications Rs 173 crore.

No bids were received for 1800 Mhz, widely known as 2G spectrum, in Delhi, Mumbai, Karnataka and Rajasthan in 2012 auction but the demand for one-time spectrum charges were raised based on base price.

Similarly demand for 900 Mhz band airwaves was raised based on reserve price formula approved by Cabinet which was to charge two times on the price of 2G spectrum.

The final 2G spectrum price in 2012 auction, despite aggressive bidding, is about 34 per cent lower in Delhi, 50 per cent in Mumbai, 41 per cent in Karnataka and 51 per cent in Rajasthan compared to the base price fixed for 2012 auctions.

Therefore, if prices were to revised under the 2013 auction price, operators would get a discount of about up

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