Anil demands lower license fee for new entrants

In his third letter in the last one month  to Prime Minister Manmohan Singh, Reliance Communications chairman Anil Ambani has lambasted the GSM operators,  and  contrary to their assertion,  has demanded that  new operators  should pay lower license fee compared to incumbents. 

GSM operators have been pushing with the Government for an upward revision of the license fee for new operators (as well as existing operators going for dual spectrum usage like Reliance )  on the premise that these prices have been fixed many years ago(in 2001). At the moment an operators has to pay Rs 1,580 crore for a pan India license.

Ambani in his letter dated 26th November points out that even as early as December 2006  GSM players which include Vodafone, Aircel and Idea were issued 23 licenses at the prevailing fee and no upward revision has been sought . 

On the contrary he argues that there is a strong case for the new players to pay less.

GSM Incumbents entered high growth market at throw-away prices of Rs. 2-3 crore in lucrative circles like Delhi and Mumbai; whereas thousands of crores is being charged to new players. He adds that as a result of this advantage the GSM operators have a subscriber base of 160 million and have been able to saturate markets and capture market share making it difficult for new operators to compete.

He also argues that while existing operators, like Idea and Spice, seek to obtain new licenses for footprint expansion but want it at license fees fixed in 2001, they want other new operators to pay more which is grossly  unfair.

Questioning some moves by GSM operators suggesting auctioning of spectrum beyond 10 MHz Ambani says that the TRAI recommendations, 3 months back, opined auction of 2G services (800, 900 & 1800 MHz) would be inappropriate. Auction Process would create unfair advantage for existing operators.

He adds that legal opinions of 4 eminent lawyers sought and submitted by COAI to DoT also clearly point out that an auction process,  would be arbitrary and in conflict with existing policy, licensing framework and contractual rights of existing operators.

Ambani who has been petitioning the Prime Minister of various issues on spectrum had earlier suggested that excess spectrum which have been given to operators beyond what is contracted should be returned back to the Government and refarmed to new players.