Opposing the government's move to impose a one-time fee on incumbent GSM operators holding excess spectrum beyond the 6.2 MHz limit, leading
telecom operators are mulling moving the Telecom Disputes Settlement & Appellate Tribunal (TDSAT) before it is incorporated in the National Telecom Policy (NTP) 2011.
Telcos are planning to approach the TDSAT after the Telecom Commission (TC) on Friday considered the Telecom Regulatory Authority of India (Trai)'s recommendations on spectrum pricing.
Telco chiefs meet PM on 3G, spectrum pricing The operators feel this is discriminatory and will harm the sector, which is already struggling to cope with an intense tariff war. The Telecom Commission, the decision-making arm of the department of telecommunications (DoT) will meet again on December 14 to work out the modalities of spectrum pricing and allowing liberal merger and acquisition (M&A) norms to promote consolidation in the 14-player market. The decisions are then slated to become part of the NTP, 2011.
TUG-OF-WAR- Telecom Commission is considering Trai's recommendations on spectrum pricing
- Telcos says this one-time fee is discriminatory and will hurt the sector
- Telecom Commission will meet on Dec 14 to work out modalities of spectrum pricing and allowing liberal M&A norms in the sector
- Commission's decisions are slated to become part of the NTP, 2011
- Telcos are also against an 8% revenue-share regime, which will also apply to tower firms and ISPs that are currently not subject to any licence fee
MUST READ: What the new telecom policy proposes Operators are planning to move TDSAT early in order to avoid penalties totalling Rs 15,500 crore if the government incorporates the one-time fee on incumbent GSM operators holding excess spectrum beyond the 6.2 MHz limit in the NTP 2011.
"That will make it binding on us to pay the huge penalty that would be anywhere around Rs 17,500 crore which we cannot afford. We are already struggling to stay afloat. We just want to ensure that such penal provisions are not part of the NTP 2011," said a top official of a leading telecom company.
The telecom industry, overall, is also against the TC considering an eight percent revenue-share regime, which is also slated to apply to tower companies and Internet service providers (ISPs) that are currently not subject to any licence fee, as it will increase the industry's outgo by several thousand crores annually.
Last year, Trai had recommended that the GSM telcos pay a one-time fee for 2G spectrum of over 6.2 MHz at rates determined for 3G auctions. The regulator then said it was reviewing its recommendations after leading operators said that the proposals were discriminatory and could harm a sector already struggling to cope with an intense tariff war.
Telcos ask govt to release DD band Sibal had recently said that the telecom ministry will charge mobile operators for additional spectrum at market-determined prices beyond the 4.4 MHz mark, indicating that companies such as RCom and Tata Teleservices will also have to pay up.
While standing by its recommendations of over six-fold jump in the 2G spectrum price, Trai had left to the government the decision for levying a one-time charge for additional spectrum beyond the contracted limit of 6.2 Mhz.
It had recommended that each Mhz of additional spectrum, after the 6.2 MHz limit held by operators, should have a one-time cost of Rs 4,571.87 crore for pan-India basis. However, from circle to circle, it would vary and the operators would have to pay only for those areas where they hold extra spectrum. It had also suggested delinking spectrum from licences.
To ensure a level-playing field among operators, Trai had recommended that if an entity, post a merger or acquisition, has up to 35 per cent market share, it would be considered to be in the 'green line' or safe harbour. Above 35 per cent but less than 60 per cent would be referred to Trai, which will carry out a detailed examination to ensure that they do not abuse their position and dominate the market concerned.
Courtesy: Mail Today
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