A Great win for GSM operators

KOLKATA/NEW DELHI: The department of telecommunications (DoT) has shot down Samajwadi Party general secretary Amar Singh’s demand to the Prime Minister’s Office that GSM players be charged a one-time spectrum charge for all radio frequencies they hold beyond 6.2 MHz. ET has learnt that DoT, in its reply, has told the PMO that it cannot adopt Mr Singh’s suggested methodology of computing the one-time spectrum levy payable by GSM players and also the quantum of additional levy on recurring spectrum usage charges.

The move comes as a major relief to GSM operators as any move to impose a one-time fee would instantly hurt the commercial interests of established GSM heavyweights like Bharti Airtel, Vodafone Essar, Idea and Aircel. As per Mr Singh’s formula, several leading GSM players will have to cough up an additional Rs 3,000 crore as some telcos hold up to 10 MHz of radio frequencies. Significantly, DoT believes any decision to compute such a one-time spectrum charge using Mr Singh’s formula could land the government in court.

Incidentally, Mr Singh demand’s closely resembled an identical request last year by Reliance Communications chairman Anil Ambani who too had written to the PMO. In his July communique to the PMO, Mr Singh had proposed an additional fee of Rs 1,312 crore should be applied for all spectrum GSM players held above the 6.2 MHz mark. His logic: Indian telecom licence entitles GSM players to only 6.2 MHz of spectrum. Mr Singh had adopted the model that was worked out by the finance ministry to arrive at the Rs 1,312 crore.

The DoT’s decision to turn down the SP’s proposals will be a major blow for CDMA-based operators. This is because, CDMA operators share the view that GSM players have been given radio frequencies beyond their licence limits. So far, despite approaching several courts, CDMA players have failed to reverse the DoT’s policies which gives up to 15 MHz of spectrum to GSM operators in a circle.