Pranab Mukherjee says there would be legal complications if the fees were returnedBANGALORE, INDIA: Finance Minister has rejected a proposal to refund $6.4 billion paid by two state-run telecom firms for 3G and broadband wireless access spectrum, the Business Standard reported on Friday, citing unnamed sources.

Pranab Mukherjee struck down the request put forth by Telecoms Minister A. Raja citing legal complications that might arise if the fees were returned to Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL), both controlled by the government, the newspaper said.

For 3G spectrum, BSNL has paid Rs. 10186.58 crore, while MTNL has paid Rs. 6564 crore. Meanwhile BSNL has paid Rs. 8313.8 crore and MTNL Rs. 4533.97 crore for BWA spectrum. Both BSNL and MTNL had taken loan to make the payment.

The government had raised over 1.06 trillion rupees ($22.8 billion) in an auction of 3G and wireless broadband spectrum this year, about 3 times more than expected, following aggressive bidding by firms in the world's fastest growing mobile market.

Raja is now working on an alternative proposal to help BSNL, which is planning an IPO, to recover growing losses from rolling out services in rural areas, the newspaper said.

The unions of both the state operators have threatened a three-day strike from Sept. 21, followed by an indefinite strike, if the government does not return the 3G and broadband money.

Mobile carriers including Bharti Airtel, Vodafone Essar and Reliance Communications won 3G spectrum in some zones while Qualcomm and Infotel were amongst winners in the wireless broadband spectrum auction.  Qualcomm will today announce its BWA partners in India.