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Spectrum refarming: EGoM defers decision

Last Updated: Thursday, October 18, 2012 - 19:36

New Delhi: A high-powered ministerial group Thursday deferred a decision on asking telecom operators like Airtel and Vodafone to give up their existing spectrum and buy less-efficient airwaves.

Telecom Minister Kapil Sibal said an Empowered Group of Ministers deferred a decision on the contentious spectrum refarming issue as "there wasn't enough time."

The EGoM was to take a view on the Telecom Commission recommendation that mobile phone firms give up all their spectrum/airwave holdings in more-efficient 900 mega hertz band when their permits come up for renewal starting November 2014.

The telecom operators can bid for the airwaves in an auction next year, or can buy replacement airwaves in the less efficient 1800 MHz band, the TC headed by Telecom Secretary R Chandrasekhar had recommended on Wednesday.

The GSM industry is opposed to this refarming or substitution of their 900 MHz airwares with inferior quality 1800 MHz band spectrum saying it will cost them over Rs 1,00,000 crore in buying replacement airwaves in an auction as also building more mobile masts and replacing some of the existing gears to continue services.

"We intend to take a decision on the refarming issue prior to start of auction (of spectrum vacated from cancellation of 2G licences by the Supreme Court)," Sibal said. "Hopefully a week before the start of the auction."

The government plans to begin auction of telecom spectrum on November 12.

"A lot of time was taken by other issues and there wasn't enough time (left) to take a decision immediately on that," he told reporters after a two-hour long meeting of the EGoM.

Sources said the EGoM reiterated its October 8 decision to levy a Rs 27,000 crore surcharge on the second-generation (2G) spectrum on existing operators.

The panel recommended to the Cabinet that GSM-based carriers be asked to pay for airwaves beyond 4.4 MHz at the auction-determined price, while CDMA carriers pay for holdings beyond 2.5 megahertz.

Sources said the levy will not be backdated and would be effected from the date of approval by the Cabinet. But for those telecom operators whose 2008 spectrum-bundled-with- licence states that they would be charged for airwaves beyond 6.2 MHz, would be asked to pay the one-time levy with effect from 2008.

The government will in November auction spectrum at a minimum bid price of Rs 14,000 crore for 5 MHz of airwaves for all the country's 22 telecom zones.

The auction base price is more than seven times what carriers paid in earlier sales where airwaves were bundled with telecom permits.


First Published: Thursday, October 18, 2012 - 08:45
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