New Delhi: In what may be good news for dual technology operators like Tata Teleservices and Reliance Communications, various ministries like law, finance, planning and corporate affairs have not supported the telecom ministry's view of charging the incumbent telecom operators the price that will be discovered in the upcoming auctions of 2G spectrum.
According to sources, these government departments felt that asking incumbent telcos to match the auction price for the 2G spectrum they hold may be legally untenable.
Interestingly, this point has also been made by the Association of Unified Telecom Service Providers of India (Auspi), the CDMA industry body. In fact, Auspi has even threatened to go to court if the government went ahead with its proposal of charging all incumbent operators the auction price for every mega hertz (Mhz) of spectrum they hold.
Ever since the department of telecommunication (DoT) mooted the proposal, the dual-technology operators have been alleging that this proposal was in favour of incumbent GSM operators, given that eight of Bharti Airtel's, 10 of Vodafone’s and nine of Idea's licences are due for renewal between 2014 and 2016.
Hence, the impact on these operators would be only for 14, 13 and six licences, respectively. However, RCom and TTSL's CDMA licences have a validity for another 10 years and dual technology ones for another 16 years. Consequently, the payout by these two would be much more than for the GSM players.
As reported by FE earlier this month, the DoT, through a cabinet note, proposed to charge all incumbent operators the auction price for every Mhz of spectrum they hold. The move by DoT is aimed at providing a level-playing field to all telecom operators — incumbents as well as new.
The proposal recommended charging for spectrum held till 6.2 Mhz (5 Mhz for CDMA) only for the remaining period of licences.
The auction price being the price discovered in the upcoming auctions, which the Supreme Court has mandated the government to conduct before August 31.
Experts said the news would bring cheer to dual technology holders like RCom and TTSL who, otherwise, would have to pay for both the CDMA spectrum as well as the GSM spectrum, compared to other incumbents, such as Bharti Airtel and Vodafone, who hold just GSM spectrum and the period of their licences is about to begin expiring in another two years.
Interestingly, this also comes at a time when Samajwadi Party chief Mulayam Singh Yadav has sent a missive to the finance minister Pranab Mukherjee urging that incumbents be spared any such charge.
According to sources, these government departments felt that asking incumbent telcos to match the auction price for the 2G spectrum they hold may be legally untenable.
Interestingly, this point has also been made by the Association of Unified Telecom Service Providers of India (Auspi), the CDMA industry body. In fact, Auspi has even threatened to go to court if the government went ahead with its proposal of charging all incumbent operators the auction price for every mega hertz (Mhz) of spectrum they hold.
Ever since the department of telecommunication (DoT) mooted the proposal, the dual-technology operators have been alleging that this proposal was in favour of incumbent GSM operators, given that eight of Bharti Airtel's, 10 of Vodafone’s and nine of Idea's licences are due for renewal between 2014 and 2016.
Hence, the impact on these operators would be only for 14, 13 and six licences, respectively. However, RCom and TTSL's CDMA licences have a validity for another 10 years and dual technology ones for another 16 years. Consequently, the payout by these two would be much more than for the GSM players.
As reported by FE earlier this month, the DoT, through a cabinet note, proposed to charge all incumbent operators the auction price for every Mhz of spectrum they hold. The move by DoT is aimed at providing a level-playing field to all telecom operators — incumbents as well as new.
The proposal recommended charging for spectrum held till 6.2 Mhz (5 Mhz for CDMA) only for the remaining period of licences.
The auction price being the price discovered in the upcoming auctions, which the Supreme Court has mandated the government to conduct before August 31.
Experts said the news would bring cheer to dual technology holders like RCom and TTSL who, otherwise, would have to pay for both the CDMA spectrum as well as the GSM spectrum, compared to other incumbents, such as Bharti Airtel and Vodafone, who hold just GSM spectrum and the period of their licences is about to begin expiring in another two years.
Interestingly, this also comes at a time when Samajwadi Party chief Mulayam Singh Yadav has sent a missive to the finance minister Pranab Mukherjee urging that incumbents be spared any such charge.
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