Delinking spectrum from the licence in the new policy, Union Minister for Telecom Kapil Sibal told reporters on Saturday that big companies like Airtel, BSNL, Vodafone and Aircel would be asked to pay market-linked prices for 2G radio spectrum beyond 6.2 MHz. Similarly, the new companies, other than these four, will also have to shell out more to increase their spectrum from the current 4.4 MHz.
This means telecom licence holder will have to go through the competitive process to obtain spectrum for wireless services. The extra cost leaves operators little choice but to hike the tariff to offset the expenditure, Telecom Ministry sources told Deccan Herald.
The current practice of bundling telecom licences with the spectrum enabled operators to offer services at lower prices triggering intense price war. The prices for the spectrum will be decided by the Telecom Regulatory Authority of India (Trai). And allocations will be made only through competitive bidding, Sibal said.
“These changes will be implemented with immediate effect,” the minister said.
The charges operators pay to the government for spectrum as revenue sharing will be uniform to create a level-playing field. The ministry has also decided to cancel licences of companies that have failed to meet roll-out obligations.
Tata Teleservices said all operators, including new and old ones, should be given 6.2 Mhz spectrum, and over and above that they should be charged as per the market price.
It said in a statement: “In line with what we have been stating during the consultation process held by the Telecom Regulatory Authority in India in the first half of 2010, we will re-emphasise that all operators be given 6.2 Mhz spectrum in a manner that those waiting for start-up spectrum are first allocated the same.”
Besides Tatas, one more operator, which did not wish to be identified, also opposed the move to limit the contracted spectrum to 4.4 Mhz saying the new regime will give huge advantage to old operators, who have millions of subscribers in their kitty.