Govt to gain Rs 21,717 crore if Trai's 2G formula gets nod

Source :Prabhakar Sinha, TNN, May 21, 2010, 12.48am IST

NEW DELHI: Bonanza for government keeps on growing. If DoT accepts Trai's recommendation that telecom operators must pay for excess 2G spectrum beyond 6.2 MHz, then government will get an additional revenue of Rs 21,717.1 crore.

This is mainly because Trai has linked price of the spectrum excess of 6.2 MHz in a circle to the price evolved in the auction of 3G spectrum, which was completed on Wednesday. As operators have bid aggressively for 3G, the cost of excess spectrum has become substantial. The government so far has not charged any money from the operators for excess spectrum and it was given on the basis of subscriber base in a circle. And, operators need not pay anything for the spectrum up to 6.2 MHz.

If an operator is holding more than 8 MHz but less than 10 MHz, he will have to pay 1.3 times of price of 3G spectrum in that circle. These rates will be applicable, if the operator is holding spectrum in the range of 1800 MHz. As the spectrum in the range of 900 MHz is more efficient than that in 1800 MHz, Trai has recommended to charge more in case of one is holding excess of6.2 MHz spectrum in 900 MHz range. It said that spectrum in the range of 900 MHz will be charged 1.5 times of the price of the spectrum in 1800 MHz.

As Bharti Airtel is holding more than 6.2 MHz spectrum in 13 of the 22 circles it operates, according to the calculation, it will have to pay the maximum amount of Rs 5,816.7 crore. Similarly, the government-owned BSNL, which has excess of 6.2 MHz in all circles, except Delhi and Mumbai, will have to pay Rs 4,970.5 crore. MTNL, which operates in the costliest circles Delhi and Mumbai, will have to pay Rs 4,681.5 crore for the excess of 6.2 MHz spectrum.

Trai's recommendation said that barring Mumbai and Delhi, in all circles, 8 MHz spectrum would be sufficient to give efficient services. In Mumbai and Delhi, Trai suggested that 10 MHz spectrum will be sufficient. Therefore, it said in Mumbai and Delhi, operators should be allowed to keep 10 MHz spectrum and in the rest of the circles it should be capped at 8 MHz. If an operator has more than this in any circle, he will have to return spectrum to compensate those operators, who have not got any spectrum so far.