Tags:
Journalism of Courage
An Empowered Group of Ministers (EGoM) today deferred a decision on refarming of spectrum held by incumbent operators like Airtel and Vodafone,asking them to vacate the 900 Mhz spectrum for the less-efficient 1800 Mhz airwaves,instead.
Telecom minister Kapil Sibal said that an EGoM deferred a decision on the refarming issue citing lack of time. Instead it has decided to ask companies that hold spectrum beyond 6.2 Mhz to pay a one-time fee to be calculated from 2008. The government will earn Rs 10,000 crore from this plan. Other than Airtel and Vodafone,state-run MTNL and BSNL too will be impacted.
About delaying the refarming decision,Sibal after a two-hour long meeting of the ministerial group said, We intend to take a decision on the refarming issue prior to start of auction. Hopefully,a week before the start of the auction.
While the auctions for 2G spectrum will begin on November 12 (required after the Supreme Court cancelled 122 licences in February),the auctions for the refarmed 900 Mhz will have to happen in 2013.
The Telecom Commission a committee of secretaries has recommended to the ministerial group led by finance minister P Chidambaram that mobile phone firms give up all their spectrum in the more-efficient 900 Mhz band when their permits come up for renewal starting in 2014.
These telecom operators have the option to bid for the airwaves next year,or settle for the replacement airwaves in the less efficient 1,800 MHz band.
The government plea is that current prices do not reflect the new demand conditions for the prized spectrum and should be priced on the basis of the November 2012 auctions.
The current operators are opposed to this refarming as they claim it will cost them over Rs 1,00,000 crore each to come back to the 900 Mhz band as also building more mobile masts and replacing some of the existing gears to continue services meanwhile.
The ministerial group has also reiterated its earlier decision to levy a Rs 27,000 crore surcharge on the 2G spectrum held by existing operators.
The panel recommended to the Cabinet that GSM-based telecom companies be asked to pay for airwaves beyond 4.4 MHz at the auction-determined price,while CDMA carriers pay for holdings beyond 2.5 MHz.
As a result of this decision,telecom companies,including Bharat Sanchar Nigam Ltd,Bharti Airtel,Vodafone,Idea Cellular,Reliance Communications and others,are estimated to pay Rs 27,517 crore to the government.
Of this amount,the GSM operators would pay Rs 18,000 crore,while the CDMA players will bear Rs 9,500 crore.
