Vodafone picks on Tata Tele, RCom over spectrum fee

Mobile operators are clashing yet again over the fee paid for spectrum (air-waves) with Vodafone claiming that Tata Teleservices and RCom were paying far less to the government - a charge denied by the two companies.

"The allegation of the incumbent (Vodafone) is illogical, baseless, misleading and a blatant attempt to divert the focus from the real issue, which is that the incumbent and other players are hoarding spectrum beyond the contracted amount of 6.2 MHz and not allowing other players to start services in Delhi," a Tata Teleservices spokesperson said.

Vodafone, one of the largest GSM operators, had said that service providers like itself and "Bharti pay the highest spectrum charges per MHz to Department of Telecom (DoT) compared to others... For example, the rate per MHz per quarter for Bharti and Vodafone for 7 circles is Rs 1.71 crore and Rs 1.37 crore respectively."

"As compared to this the rate paid by Tata and Reliance is only Rs 0.27 crore and Rs 0.22 crore,” Vodafone's Resident Director T V Ramachandran has said in a letter to DoT asking it to remove such distortions.

The rivals, however, called the allegation absurd and said Vodafone has compared payment of spectrum usage for seven circles including metros and it would be very misleading to compare these circles where the incumbents have been operating for many years and have revenues far exceeding players like Tata Teleservices and RCom and other new players in the GSM mobile-platform space.

Upset by what it called "Vodafone’s misleading calculation", one of the new operators said: "It seems they (incumbent operators like Vodafone) have decided not to allow any new player to survive in the market."

Spectrum fee has been a bone of contention among existing and new operators.

"Somewhere, amid all the allegations our competitor has made, it has forgotten to mention that we have paid the entry fee of Rs 1,650 crore twice," TTSL said, adding that "We (TTSL and RCom) are paying double the charge for both CDMA and GSM technologies."

Anil Ambani-led RCom said that old operators like Vodafone have revenues far exceeding RCom and they are paying fees as a percentage of Adjusted Gross Revenue. In many circles, where RCom has more revenues their spectrum fees to the government is higher than Vodafone.

It is absolutely "absurd" the way Vodafone has tried to "mislead" the government, RCom said, alleging that this was done with a view to keep the spectrum hoarded by players like Vodafone and not allowing new players to compete.

It is to be noted that some of the dominant operators are said to be holding in excess of over 10 MHz of spectrum across circles beyond the contracted limit of 6.2 MHz, without paying for the difference.

This itself should fetch the government over Rs 20,000 crore at market price.