2G spectrum of Airtel, Vodafone chargeable

NEW DELHI, INDIA: The Department of Telecom internal committee set up to review the recommendations made by Telecom Regulatory Authority of India (TRAI) on spectrum management and pricing has come across a note issued by the department according to which some amount of spectrum allocated to Bharti Airtel and Vodafone can be indisputably charged.

“There was a note circulated on January 17, 2008 that any amount of spectrum allocated to telecom operators will be chargeable at any price realized in future. Basically market determined price,” said a senior DoT official who did not want to be named.

According to the official, Bharti Airtel has 32.2 Mhz of excess spectrum compared to the base level of 6.2 Mhz as recommended by TRAI. The official was unable to recall exact amount of extra spectrum that Vodafone Essar has. However, he estimated it to be around 28 Mhz.

Bharti Airtel was allocated 9.4 Mhz of spectrum after the date mentioned in notice. This excess spectrum was allocated to the company in six telecom circles namely UP (East), Bihar, Tamil Nadu, Andhra Pradesh and Maharashtra.

Voadfone Essar was allotted 1.4 Mhz spectrum after January 17, 2008 in two circles namely Tamil Nadu and UP (East).

This note comes in contrary to the objection raised by GSM players on recommendation of TRAI.

Sunil Bharti Mittal, head of Bharti Airtel, had contested on TRAI’s recommendation and pointed that spectrum to his company and other players were allocated from time to time and there was no question of any additional payment.

However, for spectrum allocated to both the companies is subject charge. Internal committee of DoT on TRAI is likely to charge both the telecom service providers on the formula that will be recommended by the regulator.

According to the last calculation made by TRAI, Bharti Airtel will have to pay Rs 3500 crore for the extra spectrum that the company holds. For Vodafone Essar the charges amounted to Rs 2,849.

Though all the GSM players raised their objection to the level of payment recommended by TRAI, this note discovered by DoT has left both the leading telecom operators in lurch.

CIOL contacted both the telecom companies for their comments but no replies were received.