Dual-tech telcos request PM to shelve one-time fee proposal
New Delhi: Telecom operators association AUSPI has asked Prime Minister Manmohan Singh to reject the EGoM recommendations of imposing Rs 27,000 crore one-time spectrum fee on existing mobile phone operators, saying such a move was legally untenable.
An Empowered Group of Ministers (EGoM) headed by Finance Minister P Chidambaram had last week proposed imposition of a one-time fee on GSM mobile operators holding more than 4.4 MHz of spectrum and CDMA operators with over 2.5 MHz airwaves.
"EGoM recommendations should be reconsidered as they are not legally tenable and against the well-established principle of bounden duty of the government to honour its existing contracts with the licensees," Association of Unified Service Providers in India (AUSPI) said.
The Cabinet is likely to consider the EGoM recommendations on October 16.
AUSPI, which represents dual-technology mobile phone companies like Tata Teleservices and Reliance Communications, said contracted spectrum for GSM is 6.2 MHz and for CDMA is 5 MHz and charge for such spectrum has already been paid by the operators as the licence came bundled with spectrum up to the contracted limit.
"Charging for any spectrum below the contracted limit now... Is illegal and in complete breach and violation of its contractual obligations and provisions of Contract Act," AUSPI said in the October 12 letter, copies of which were also sent to all the EGoM members, Cabinet Secretary and Principal Secretary to the Prime Minister among others.
However, the government believes that contract would at best apply to the quantum of spectrum and not to the price of spectrum.
The decision to charge an auction-determined price from the existing players will hurt the dual technology players the most as their permits are valid for many years to come.
AUSPI said the enforcement of prospective charging would create more inequalities and discrimination among the existing players as the residual period of valid licences vary from two years to 10 years between GSM players and late entrants like Tata Teleservices and Reliance Communications.
"We therefore request you that keeping in mind the benefit of the consumers, the EGoM recommendations of mid-term unilateral change to the contracts of our member service providers by imposing a one-time charge for spectrum beyond 4.4/2.4 MHz of GSM/CDMA spectrum and up to 6.2/5 MHz i.e., contracted spectrum may immediately be shelved," AUSPI secretary general Ashok Sud wrote in the letter.
The EGoM, officials say, took the decision of levying the fee to create a level-playing field between the old and new players.