Union Cabinet levies 1-time fee on telecom firms

New Delhi, Nov 7: The

companies which hold

spectrum must pay nearly Rs 31,000 crore as one-time fee, the Union Cabinet decided today.

Finance Minister P Chidambaram told newspersons here that a recommendation by the Empowered Group of Ministers to levy the one-time fee on the telecom firms was approved by the Cabinet.

Accordingly, incumbent GSM-based operators holding beyond 4.4 megahertz will pay a fee that will be determined during the upcoming auction of GSM airwaves on Nov 12.

Since not even a single CDMA-based operator is willing to participate in a similar auction, the Finance Minister said that the Department of Telecom will see how much the CDMA-based operators which hold spectrum beyond 2.5 megahertz should pay as one-time fee.

The GSM-based operators which hold over 6.2 megahertz will pay a retroactive fee for the spectrum from Jul 2008. The companies can pay the fee in monthly instalments at an interest rate of 9.75 per cent, he said.

Those operators unwilling to pay the one-time fee "will be given an option to surrender spectrum beyond 4.4 megahertz for GSM", the Finance Minister added.

The government had planned to raise a whopping Rs 40,000 crore from the GSM and CDMA auctions. The base price for 5 megahertz of a pan-India GSM spectrum was set at Rs 14,000 crore while the base price for CDMA was set at 1.3 times that of the GSM spectrum.

However, the withdrawal of Tata Teleservices and Videocon Telecommunications from the CDMA auction meant that only the GSM auction will be held on Nov 12.

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