Telecom firms urge PM to cancel one-time spectrum fee

Chief executives of India's top three GSM mobile phone companies have written to Prime Minister Manmohan Singh, opposing the imposition of a one-time spectrum fee by the government.

Sanjay Kapoor, CEO, Bharti Airtel; Himanshu Kapania, managing director, Idea Cellular; and Marten Pieters, managing director and CEO, Vodafone India, in their joint letter to Singh have said the one-time fee violated the terms of their licences and breached an agreement that they had reached with the industry in 2002.

Earlier this month, the union cabinet accepted the recommendations of an empowered group of ministers, demanding a one-time fee for the excess spectrum owned by telecom operators, which would result in the government getting a hefty Rs31,000 crore.

According to P Chidambaram, the government will be imposing the charges for spectrum for holdings beyond 4.4 Mhz in the GSM segment on auction determined price. For spectrum above 6.2 Mhz, a one-time charge is being levied from July 2008 onwards.

GSM operators will have to shell out nearly Rs25,000 crore, with private sector plays accounting for more than a half of it. The central government will bear the cost of one-time fees on behalf of state-owned firms BSNL and MTNL.

''We are at a loss to understand the basis and justification on which such a high one-time fee has been proposed without corresponding reduction in spectrum usage charge,'' the three top executives wrote to Singh. ''The proposed one-time fee will only lead to unjust enrichment for the government by way of double charging of the same spectrum.''