Trai Says Telcos To Pay New Fee for Excess 2G Spectrum

Telecom regulator Trai on Wednesday recommended a whopping over six-fold jump in 2Gspectrumcost for operators, a move that may make mobile services costlier. Trai has also recommended a 'one-time' entry fee for additional spectrum beyond 6.2 Mhz.

Trai has recommended Rs 10,972.45 crore for the contracted 6.2 Mhz spectrum for pan-India licence as against Rs 1,658 crore being paid by the operators now.

While, each Mhz of additional spectrum held by operators should cost a one-time Rs 4,571.87 crore (all India), however, it would vary from circle to circle and the operators would have to pay only for those where they hold extra spectrum. Trai has also said every Mhz of additional spectrum (on an all-India basis) beyond the contracted limit of 6.2 Mhz would cost a massive Rs 4,571.87 crore.

These revised prices should be made applicable with effect from April 1, 2010 on pro-rata basis depending upon the number of years left for licences to expire, Trai said, adding that any licence coming up for renewal would have to pay for spectrum based on the new price.

Two leading telecom firms,
Bharti and
Vodafone on Wednesday, expressed concern over the 2G spectrum pricing recommendations of Trai, terming them as flawed, illogical and discriminatory against the older operators. Most of the telecom firms, including Bharti, Vodafone,
Idea and state-owned companies like BSNL and MTNL, hold extra spectrum beyond 6.2 Mhz and the new norms would put a huge financial burden on these telcos.

Experts say these recommendations which are likely to be accepted by the government are bound to push up telecom tariffs in India, considered to be the cheapest in the world.

Cellular Operators Association of India, a lobby for GSM service providers, termed Trai’s recommendations as disastrous for a majority of the operators and said that it is like changing the goal posts in the middle of the game.

The biggest hit in terms of payout will be taken by the bigger telecom companies. So, while the government owned BSNL will end up paying about Rs 7,000 crore, the payout for the country's largest private company Bharti will be in the region of Rs 4,000 crore.

akankshas@cybermedia.co.in