Spectrum: Bharti will pay premium

Offers Rs 1,000cr premium for pan-India licence.

In a fresh twist to the spectrum imbroglio, India's largest GSM mobile service operator, Bharti Airtel, has written a letter to the Department of Telecom (DoT) offering to pay Rs 2,650 crore for start-up pan-Indian spectrum of 4.4 Mhz, which it urgently needs to avoid network congestion.

Bharti's offer is Rs 1,000 crore higher than what a GSM player wanting a pan-Indian licence currently pays. It is also higher than what Reliance Communications (RCom), operator of the rival CDMA technology, paid the government as part of the cross-over technology policy to get start-up spectrum to operate GSM services within its existing licence.

The Rs 1,000-crore premium has been calculated on the basis of an 8 per cent compounded interest since 2001, the last year that spectrum prices were fixed.

The telecom company has also made it clear that it would be ready to pay more in the event of an auction for pan-Indian GSM spectrum allocation and that the Rs 2,650 crore could be taken as the initial bid offer.

In its letter to DoT Secretary D S Mathur, written by joint managing director Akhil Gupta, Bharti has stated that "it is important for us to point out that while attempts are being made to choke the GSM operators of their spectrum needs, the CDMA operators are being happily conferred additional spectrum beyond the highest entitlement".

Justifying the offer, the letter described as "odd" the proposal that CDMA operators, who have their full entitlement at 5 Mhz of CDMA spectrum (equivalent to 10 Mhz of GSM spectrum), be given additional 4.4 Mhz of GSM spectrum.

However, Bharti's and other GSM operators' applications for additional spectrum, on the basis of the policy in force, have been pending for over 18 months in several cases.

The letter added that since the only plausible justification for the decision to allocate GSM spectrum to CDMA operators seems to be the additional amount that is being charged, Bharti has been left with no option but to follow the same practice, albeit at a more realistic amount than what has been currently proposed.

An RCom spokesperson said Bharti is not entitled to a second GSM licence on any condition, and the letter is another method of preventing competition and confusing issues.

Bharti's letter also made it clear that the company would continue to agitate, represent and follow up its legitimate legal options for rightful entitlement of spectrum.

The company through the Cellular Operators Association of India has already appealed to the telecom tribunal demanding the withdrawal of the cross-over technology policy.

DoT deadline

The committee set up by Department of Telecommunications to suggest new subscriber norms for mobile operators to qualify for additional allocation of spectrum has been given a two-week extension to give its final report.