New Delhi:
The Supreme Court has asked the government to explain why it is not auctioning all the spectrum that was linked to 122 mobile network licenses cancelled in February this year. The auction is scheduled for November 12. Five companies -- Bharti Airtel, Idea, Vodafone, Videocon and Telenor-promoted Telewings -- have confirmed they will participate. The Department of Telecommunications will answer the Supreme Court tomorrow.
In February this year, the Supreme Court cancelled 122 licenses for cellphone operators issued in 2008 by then telecom minister A Raja.
The companies had paid Rs 1,600 crores for each license; they were not charged separately for second-generation or 2G airwaves.
The reserve price set for the upcoming auction is Rs 14,000 crores, seven times that of the license fee in 2008. Telecoms say the new price is forbiddingly high and will force higher rates for cellphone calls.
To provide a level playing field for incumbents and new entrants, the government has decided to charge a one-time fee for airwaves held by established cellphone providers. The one-time fee will be based on the upcoming auction of second-generation spectrum.
The cabinet today also approved a proposal which says that companies who buy carriers that paid the lower license fee in 2008 will have to match the new price determined by the upcoming auction - the difference will be paid to the government.
GSM-based carriers will pay for airwave holdings beyond 4.4 megahertz at a price to be determined by the auction, while CDMA carriers pay for holdings beyond 2.5 megahertz, from January onwards.
In addition, GSM-based carriers that have more than 6.2 MHz of airwaves will also pay a retroactive fee for the extra airwaves for the period between July 2008 and December this year.
While the auction for GSM airwaves starts next week, India will have to defer auctioning off CDMA airwaves as two bidders who had initially applied to bid later withdrew.
"On the CDMA issue, we will come back to the cabinet because there is no auction discovered price now, but that does not mean they can get away without paying a price," Telecom Minister Kapil Sibal said, adding his ministry would come back to the cabinet with a proposal on what basis the fees would be collected.
The one-time fee is expected to raise about 31,000 crores, a timely windfall for a government looking to rein in a high fiscal deficit.
(with inputs from Agencies)