The Attorney General has advised the empowered group of ministers (EGoM) on telecom not to levy a one-time charge on mobile operators for the spectrum they already hold on a prospective basis.
However, the country?s highest law officer has said that operators, such as Bharti Airtel, Vodafone and Idea Cellular, should be charged a one-time fee for the spectrum they hold beyond 6.2 MHz. This is because the government is contractually bound to provide spectrum under the subscriber-linked criteria without any additional charge only up to 6.2 MHz.
However, in a slight relief to the country?s top three GSM operators, the AG?s view ? sent to the EGoM on October 4 ? states that the one-time charge should not be from the date of allocation (2001), but from July 2008, when the finance and telecom ministers met and decided, in-principle, to charge operators for the excess spectrum.
The EGoM, headed by finance minister P Chidambaram, is scheduled to meet on Monday to take a decision on the issue. The last meeting of the EGoM took place on October 3, but its decision was deferred as the views of the AG, GE Vahanvati, were not in by then.
The department of telecommunications (DoT) had proposed a one-time spectrum charge on all operators to create a level playing field. However, quoting from past judgments of the Supreme Court, the AG has said that this was an esoteric concept and could not be equated with public interest. ?Public interest and common good are constitutional mandates, level play field cannot be elevated to this level,? the AG said.
The AG?s views on not charging all operators on a prospective basis for the spectrum they hold would come as a huge relief for dual-technology operators, such as Reliance Communications and Tata Teleservices, who had been agitating against it.
The one-time charge was to be on the basis of the price discovered in the forthcoming auctions of 2G spectrum, which begins on November 12, and for which the base price has been fixed at R14,000 crore.
Though the EGoM had earlier decided on all other aspects of the auctions, a decision on the one-time levy was postponed till the outcome of the Presidential reference by the Supreme Court. The court recently said that auctions are not the only way to allocate natural resources and the government is free to choose any methodology so far it is fair and enhances social good. However, the court is free to strike down the methodology if it finds the process chosen by the government to be patently unfair and ultra vires of the Constitution.
After the outcome of the reference, the EGoM had once again sought the opinion of the AG on the matter. At an earlier occasion, the AG had declined an opinion on the grounds that the reference was pending in the court.
If the EGoM now takes a decision on the matter of the one-time levy, it would be sent to the Cabinet for a final ratification. The one-time levy had the different ministries also divided with the DoT pursuing it, and the Planning Commission and the finance ministry opposing it. While the DoT wanted that the auction-determined price be levied as a one-time charge on all the incumbent operators for the spectrum they hold, the finance ministry and the Planning Commission had espoused the alternative between levying the one-time charge either for spectrum held beyond 4.4 MHz or 6.2 MHz.
While a one-time levy on all the operators would have fetched the government revenues worth Rs 72,792 crore, charging for spectrum held beyond 4.4 MHz would have brought in around Rs 50,000 crore. If the government decides to charge for spectrum held beyond 6.2 MHz from the three operators, it would get around Rs 22,640 crore. If this charge was from the date of allocation (2001), the amount would have been around Rs 38,000 crore.