The Empowered Group of Ministers, which is meeting on Monday, has a tough job on its hands with the Attorney-General saying that incumbent operators with over 6.2 Mhz should be charged a one-time fee. This is in variance with EGoM’s preliminary views that favour imposing the fee on all operators with more than 4.4 Mhz.

This difference is critical for the industry because fortunes can change depending on whether the cut-off will be fixed at 4.4 Mhz or at 6.2 Mhz. If it is 6.2 Mhz, then the impact will be on Airtel, Vodafone and Idea Cellular.

Tata Teleservices and Reliance Communications will not have to pay anything as they only have 4.4 Mhz. In addition, they can also claim more spectrum to take their total quantum up to 6.2 Mhz. But if the cut-off limit is fixed at 4.4 Mhz, then the two players will not be able to claim additional spectrum.

At the last meeting on October 3, the EGoM had stated that the fee should be fixed for spectrum above 4.4 Mhz in order to level the playing field. “This option would also insulate the Government from claims by operators that had received only 4.4 Mhz for the balance of this spectrum without any further payment,” states the Minutes of the EGoM meeting, seen by Business Line . But Attorney-General Ghoolam Vahanvati has said that issue of level playing field should not be the governing factor for deciding one-time fee for incumbent players.

The Attorney-General said that licence conditions can be modified only in public interest or in the interest of national security.

“If there is no direction of a court to level the playing field, it may not be required to be done at all much less by altering contracts.

“The concept of a level-playing field itself may be an esoteric concept which cannot be equated with public interest,” the AG said in his opinion on the issue of charging one-time fee on incumbent operators.

The AG has, therefore, ruled out imposing a fee on all operators with more than 4.4 Mhz spectrum, but has favoured the option wherein operators with more than 6.2 Mhz spectrum should be asked to pay.

The Department of Telecom had given three options to the EGoM including charging for all spectrum held by all operators, charging beyond 4.4 Mhz spectrum and the third option of collecting a fee from those with more than 6.2 Mhz.

While the first option to charge for all spectrum is ruled out, the EGoM will weigh between the other two options on Monday.

> Thomas.thomas@thehindu.co.in

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