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Policy & Regulation
New operators to pay for additional spectrum beyond 4.4MHz
TT Correspondent |  |  02 Jan 2012

The government is believed to have taken a decision that extra spectrum beyond 4.4MHz will be allotted through auction. While the old operators have been kept out of this sticking to the earlier agreement of 6.2 MHz, against one-time charge, the decision is going to burden the new operators. 

 

Sometime back the leading telecom service operators including Tata Teleservices, Rcom, Sistema-Shyam and Uninor in a letter to the telecom minister Kapil Sibal had called the government’s proposal to charge the new telcos for additional spectrum as ‘discriminatory’. 

 

Expressing concerns over the proposed move to charge for additional spectrum beyond 4.4 MHz, these operators said that they have an agreement with government for allotment of 6.2MHz against one time fee and all of a sudden one party has changed the valid legal contract which will lead to financial implications for them.

 

"If new operators like us are now going to be burdened with additional payment for 1.8/2.5 MHz spectrum, it would impact our sustainability and scalability," the letter said.

 

"The valid legal contract cannot be unilaterally changed by one party especially when the proposal has huge financial implication to the other party. The principle natural justice requires the consultation with the party who is going to be financially adversely impacted, by the unilateral change in the license provision," the letter had said.

 

These telcos had said that 6.2/5 MHz is considered contractual minimum and optimal quantity of spectrum for pan-India GSM operations according TDSAT, DoT and TRAI.

 

They also cited the content of a TRAI  letter in this regard. "TRAI in its letter dated May 3, 2011 and reiterated on November 3, 2011 that no fees should be charged under the prevailing policy," the letter had said.

 

These service operators lamented that on the basis of the original agreement they had chalked out their strategies for network, financial, marketing and roll out activities and the change in the contract would mean that all these plans would be jeopardized.

    
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02 Jan 2012(IST)  
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