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Old telecom operators are likely to get some relief in one-time spectrum charges, estimated at Rs 23,197 crore at present, as the department of telecommunications (DoT) is calculating rates afresh based on the February auction price.
“There will be a revision in the rates of four circles — Delhi, Mumbai, Karnataka and Rajasthan — for 1,800 MHz and in three metros where auctions for the 900-MHz band were held in February. Rest will remain the same,” a DoT official told PTI.
“The process has started. I cannot share the exact time when the notice will be sent but possibly within a month,” the official said.
The one-time 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 licences for Rs 1,658 crore for pan-India operations.
Most of the operators were allocated additional spectrum without upfront charges.
The Union government in 2012 decided 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 the auction.
DoT had raised a total demand of Rs 23,197 crore from telecom operators, which were issued licences in 2008 (old telecom operators).
The amount was arrived at on the basis of the floor price fixed for the November 2012 auction. The bid got a tepid response as the base price was considered high.
According to this calculation, state-owned Bharat Sanchar Nigam Ltd had to pay Rs 6,912 crore, Bharti Airtel Rs 5,201 crore, Vodafone Rs 3,599 crore, Mahanagar Telecom NIgam Ltd 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 1,800 MHz, widely known as the second-generation or 2G spectrum, in Delhi, Mumbai, Karnataka and Rajasthan in the 2012 auction but the demand for the one-time spectrum charge was raised based on the base price.
Similarly, demand for the 900-MHz band airwaves was raised based on the reserve price formula approved by the Union Cabinet, which was to charge two times on the price of the 2G spectrum.
Decision pending
The final 2G spectrum price in the 2012 auction, despite aggressive bidding, is 34 per cent lower in Delhi, 50 per cent lower in Mumbai, 41 per cent lower in Karnataka and 51 per cent lower in Rajasthan compared to the base price fixed for the 2012 auctions.
Therefore, if prices were to be revised according to the 2013 auction prices, operators would get a discount of up to 51 per cent for the Rajasthan circle, 25 per cent in the Mumbai service areas and 34 per cent in Delhi for 1,800 MHz. Similarly, the final bidding price in 2013 for the 900-MHz spectrum, considered two times more efficient than the 2G spectrum, was five per cent lower in Delhi and 26 per cent lower in Mumbai compared to the base price fixed for the 2013 auction. In Kolkata, the price of the 900-MHz band spectrum was seven per cent higher compared to the base price fixed for the 2012 auctions.
Telecom operators have challenged before courts the government decision to levy a one-time spectrum fee. The issue is still pending in the courts.
RATE REVISION
- One-time spectrum charges estimated at Rs 23,197 crore at present
- A revision likely in rates of four circles — Delhi, Mumbai, Karnataka and Rajasthan — for 1,800 MHz and in three metros where auction for the 900-MHz band were held in February
- If revised according to the 2013 auction prices, operators to get a discount of up to 51% for the Rajasthan circle, 25% in the Mumbai service areas and 34% in Delhi for 1,800 MHz
