BSNL, Bharti to be big losers of new 2G spectrum pricing

BSNL, Bharti to be big losers of new 2G spectrum pricing

Among the leading operators -- Bharti, Vodafone and Idea Cellular -- BSNL may have to pay about Rs 15,700 crore for the additional spectrum it holds across 21 telecom circles.

A back of the envelope calculation shows that the country's largest operator by subscriber base, Bharti airtel may have to pay close to Rs 8,700 crore for the additional spectrum (radio waves) it holds across various circles.

The figures for operators may vary as the recommendations are for the spectrum in the 1800 Mhz band. Some operators, especially Bharti, hold significant spectrum in 900 Mhz band which was defined as relatively 'superior' and may entail even higher costs.

Following government auditor CAG's estimated loss of up to Rs 1.76 lakh crore in the allocation of 2G spectrum in 2008, Trai was asked to submit fresh recommendations on the pricing taking into account the changed market scenario and increased value of the scarce radio waves.

The Telecom Regulatory Authority of India (Trai) in its recommendations submitted today said the price for 6.2 Mhz of pan-India start-up 2G spectrum should be fixed at Rs 10,972.45 crore, more than six times the present cost of Rs 1,658 crore.

Trai has also said that every Mhz of additional spectrum (on an all-India basis) beyond 6.2 Mhz would cost a massive Rs 4,571.87 crore.

Spectrum prices for both the categories -- up to 6.2 Mhz and beyond 6.2 Mhz -- vary from circle to circle.

Up to 6.2 Mhz, the prices of one Mhz vary from Rs 7.60 crore in the case of Jammu and Kashmir to Rs 187.38 crore for Tamil Nadu.

Beyond 6.2 Mhz, the price varies from Rs 22.89 crore per Mhz in Jammu and Kashmir to a maximum of Rs 431.95 crore in Andhra Pradesh.

Trai has recommended that new prices be made effective from April 1, 2010. Another big operator, Vodafone may be asked to give as much as Rs 5,000 crore as one-time fee for excess spectrum it holds, while Aditya Birla group firm Idea Cellular may have to pay Rs 4,000 crore.