The Department of Telecom will once again seek the Attorney-General’s opinion on the decision of the Empowered Group of Ministers (EGoM) on charging one-time spectrum fee from incumbent operators.
The EGoM had decided on Monday that all operators with more than 4.4 Mhz should pay a fee for the remaining period of the 20-year licence. However, the AG in his opinion sent to the EGoM had said that operators with more than 6.2 Mhz should be asked to pay the one-time fee, that too from July 2008 onwards.
Legal issues
Senior DoT officials explained that the EGoM could not agree with the AG’s opinion due to legal and technical complications that may have arisen.
For instance, if the EGoM had agreed to fix the cut-off date at 6.2 Mhz, operators that had got only 4.4 Mhz till now would have clamoured for the balance.
According to DoT’s estimates, there are over 60 licensees who would have claimed additional spectrum without paying any charge. This would have disturbed the playing field with new players which have to pay as much as Rs 14,000 crore for the start-up spectrum.
DoT officials said the one-time fee could not have been imposed retrospectively from 2008 onwards because that would tantamount to imposing 2012 price to 2008. DoT reckons that this may not be legally defendable.
The decision of the EGoM will be sent to the AG for suggestions that will then be presented before the Cabinet for final decision.
Meanwhile, the Deputy Chairman of the Planning Commission Montek Singh Ahluwalia expressed concerns at any attempt made to alter contracts. Ahluwalia, who was not present at the EGoM meeting on Monday, feels that the contracts signed with operators must be respected.
In a note to the EGoM, he wrote that the government should not change the rules mid-stream.
“Level playing field argument does not hold ground and the telecom companies should not be prospectively charged,” he said in his note.
Retrospective changes
His note further pointed out that perception among investors that Government is quick to make retrospective changes should change.
The EGoM had also decided to refund the entry fee of Rs 1,650 crore to companies whose licences were cancelled. However, there will be no refund for operators that were charge-sheeted. Operators such as Sistema Shyam and Videocon can claim the refund if they do not want to participate in the upcoming auction. They can also get the amount adjusted in the final bid amount in case they win spectrum in the auction.