Sunday, February 13, 2011

Old Telcos Likely To Challenge TRAI Fine

 Old telecom players — Bharti, Idea and Vodafone are considering a legal challenge against Trai’s recent recommendation to levy heavy spectrum charges on them. Trai has recommended this penalty for excess spectrum held by these companies.
The CAG, which had pegged the exchequer’s loss due to the 2G scam at Rs 1.76 lakh crore had also ascribed Rs 37,000 crore of the total to the excess spectrum held by these firms. “If the telecom department accepts the Trai recommendation, we will have no choice but to challenge them in the courts. The Trai recommendation are unjust and the charges they have announced are too high,” said a senior official from a telecom company.
In fact last year Bharti, Vodafone and Idea had challenged in TDSAT, Trai’s recommendation which had first talked about levying one time charge on these old telecos for the spectrum they hold beyond 6.2 Mhz based on the price discovered in then on-going 3G auction. These companies were forced to withdrew their petition because at that time telecom department had not accepted these recommendations and therefore the petition was not “maintainable.”
However, then Trai on its own had told the telecom department that it will study the matter in detail and will give recommendations separately on how to charge the spectrum beyond 6.2 Mhz. Last week, Trai finally came out with its report recommending that companies be asked to pay Rs 4,571 crore for every MHz of spectrum they hold on a pan-India basis over the contractual limit of 6.2 Mhz.
The government is expected to get additional revenue of Rs 16,000 crore if it accepts these recommendations, an analysis by Emkay Global Financial Services shows. BSNL, which holds the maximum amount of additional spectrum, will have to pay Rs 7,000 crore. BSNL has excess spectrum in 19 circles (61 Mhz), Bharti in 13 circles (32 Mhz), Vodafone in seven circles (19.6 Mhz), Idea in six circles (12.6 Mhz), MTNL in two circles (12.4 Mhz), BPL in one, Reliance in one, Aircel in one and Spice (now Idea) in one, according to CAG report.source.

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