Charging for spectrum of existing telcos discriminatory: AUSPI

Charging for spectrum of existing telcos discriminatory: AUSPI New Delhi: Telecom industry body AUSPI has opposed a Department of Telecom's proposal to levy a one-time charge on existing operators for spectrum they hold, saying the move was "discriminatory" and violative of licence condition."

The Association of Unified Telecom Service Providers of India in a letter to Telecom Minister Kapil Sibal said the proposal to charge for all spectrum held by telecom operators whose licences were not cancelled by the Supreme Court in the 2G scam "will trigger widespread international default of billions of dollars".

DoT has proposed to charge for all spectrum held by existing telecom players at the rates which new telecom operators will pay in the auction of airwaves due to start in November.

Existing telecom operators were allocated spectrum alongwith pan-India licences at Rs 1,658 crore only while new telecom operator will have to pay minimum of Rs 14,000 crore for spectrum to operate across country.

"The proposal to charge for the existing spectrum for the balance period of licences at auction discovered prices by altering the terms and conditions of the licences unilaterally is illegal, violative of the licence conditions and would create more inequalities and discrimination among the existing operators," AUSPI wrote on October 1.

The proposal of DoT is aimed at creating level playing field between old and new operators but AUSPI said "imposing charges up to 5 Mhz/6.2 Mhz (spectrum) clearly favours one set of operators who were early entrants and consequently have the shortest period to renewal."

AUSPI, which represents firms like Reliance Communications, Tata Teleservices among others, in the letter said that as security for the loans availed, companies have executed tripartite agreement with banks and government (DoT).

It added that under the loan facility agreement if any telecom licence is amended, modified or renewed in a manner or to extent which could be reasonably be expected to have a material adverse effect, the same will treated as even of default.

"According, if one time spectrum charge for remaining validity of licence is implemented, it will trigger an event of default and all lenders will immediately exercise their rights... And call for immediate payment of all outstanding loans," AUSPI said.

The association said that this will trigger widespread international default of billions of dollars with all the lenders situated in countries across globe.

"This will also lead to huge international litigation, and claims for damages against the Indian government," AUSPI said, demanding the proposal of one-time fee on spectrum of existing telecom operators should be dropped.

PTI