Written By Rana G on Friday, December 17, 2010 | 7:21 PM
NEW DELHI: Following the Supreme Court order widening the spectrum probe to include telecom policy from 2001, the government plans to ask telecom firms to pay for excess spectrum allotted to them during this period. The probe will cover at least two instances of excess spectrum being allocated in 2006 and 2008-09.
The government's action would be in keeping with the Comptroller and Auditor General's report which said nine operators were allotted spectrum beyond the upper limit laid down in the Unified Access Service Licence agreement, costing Rs 37,000 crore in revenue.
"Whenever excess spectrum was allocated, no one paid for it," said a telecom ministry source.
The government has been considering action on the issue of allocation of excess spectrum since DMK's A Raja resigned as IT and communications minister in mid-November and its intent seems to have firmed up. The action would be in keeping with the Comptroller and Auditor General (CAG) report, which said nine operators were allotted spectrum beyond the upper limit laid down in the Unified Access Service Licence agreement.
"Thus while DoT, on one hand, was not processing pending applications for licence due to non-availability of spectrum, on the other hand it was allotting spectrum to existing operators beyond the contracted limit without any upfront charges being imposed or without determination of market price of spectrum," the CAG report said.
The nine firms named in the CAG report are Aircel, Bharti, BPL ( Mumbai), BSNL, Idea, MTNL, Reliance, Spice (Punjab) and Vodafone. The CAG report said excess spectrum had cost the government Rs 37,000 crore in revenue.
While some aspects of the debate are embroiled in the corporate war between "old" and "new" telecom operators, government-run firms were also found to be beneficiaries of excess spectrum.
Although a formula for levying charges on telecoms firms is yet to be worked out, if they are linked to the 3G spectrum prices, as is likely, the impact could be significant. The criticism that spectrum was sold cheap at 2001 rates in the 2G allocations of 2008 has hurt the government and it is wary of appearing vulnerable on this count.
The view in the government seems to be that even spectrum allocations before 2008 can be assessed and charges levied. Telecom minister Kapil Sibal is expected to offer an assessment of the telecom policy and announce his ministry's plans on excess spectrum and other issues shortly.
The DoT has in the past considered asking telecom firms to pay for spectrum in excess of 6.2Mhz with some firms holding airwaves up to 10Mhz in cities. Trai, in a report some months ago, recommended that telecom operators be asked to pay up.
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