The empowered group of ministers (EGoM) on telecom, headed by union finance minister P Chidambaram, will meet on Wednesday to take a decision on charging incumbent telecom service providers for excess spectrum held by them.
The moot point for the debate is the quantum of
According to the report of the statutory auditor, Comptroller and Auditor General (CAG), the government would have earned Rs. 36,933 crore by charging for excess spectrum.
Under the old licensing regime, telecom licences were issued along with a start up spectrum of 4.4 MHz. For any bandwidth beyond this, incumbent operators were issued spectrum, but were not charged the customary one-time fee.
Wednesday’s meeting has become important as last week, the Supreme Court declined to give an opinion on this issue, which came before it in a Presidential reference. The government has been making efforts to contain the high fiscal deficit, and the finance ministry wants to meet its target of raising Rs. 40,000 cr through spectrum auction and charges by March, 2013.
The CAG report in November 2010 stated: “The DoT, on one hand, was not processing pending applications for licence due to non availability of spectrum, on the other hand it was allotting spectrum to existing operators beyond the contracted limit without any upfront charges being imposed.”
The auction for 2G spectrum will be held in November. The national exchequer may not get more than Rs. 15,000 crore through this sale in the fiscal year 2012-13 as only 33% of the final bid amount has to be paid upfront. The rest is to be paid in 10 equal installments.
In January this year, the Telecom Commission gave the nod for charging for excess spectrum retrospectively from the date of allotment. Telecom Commission is the highest decision-making authority in the telecom sector and comprises of nine secretaries.
However, instead of implementing this decision, the DoT (department of telecommunication) referred it to the EGoM.
Former VSNL head BK Syngal said the DoT is delaying implementation of this order unnecessarily, and ought to have implemented it after the Telecom Commission gave the go-ahead.