DoT asks telcos to pay one-time fee of Rs 20,000 cr

The New Year has started badly for the telecom companies, with the Department of Telecom asking operators with excess spectrum to pay the one-time charges from January 1 onwards. Six incumbent operators have to pay a total of Rs 20,115 crore to the Government for holding spectrum beyond 4.4 Mhz.

Future adjustments

Among the private players Bharti Airtel has to pay the maximum of Rs 4,281 crore, followed by Vodafone at Rs 2,969 crore.

The state-owned Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd are supposed to pay Rs 9,983 crore but this may be adjusted against other payments.

The one-time fee has been calculated on the basis of the recently concluded spectrum auction. Since four circles — Delhi, Mumbai, Rajasthan and Karnataka — received no bids during the auctions, the charges levied are provisional.

They will be adjusted based on the outcome of the next round of auction scheduled for March. Similarly the one-time fee for 900 Mzh will also be adjusted once the auction gets over.

The Cabinet had earlier given its consent to collection of this one-time fee from incumbent operators. All operators with over 4.4 Mhz of spectrum will have to pay this fee for the remaining period of their licence. For example, Airtel in Delhi owns 10 Mhz spectrum but its licences expires in 2014; therefore, it needs to pay for 5.6 Mhz airwaves for the remaining one year.

Telecom companies are allowed to pay the money in equal instalments for the balance period of their licence but with an interest rate of 12.75 per cent.

Levelling the field

The fee was introduced by the Government after it was criticised for giving away spectrum cheaply. The DoT also wanted to level the playing field with new players, who are now being forced to buy spectrum at market price through the auction mechanism.

However, the additional burden on telecom companies will force them to increase tariffs. Airtel and Vodafone have already said that this additional charge, combined with re-farming costs, will push up tariffs this year.

thomas.thomas@thehindu.co.in