TRAI has recommended a new price for 2G spectrum, which will cost seven companies in excess of Rs 16,000 crore. CNBC-TV18's Siddharth Zarabi reports.
This is an important bit of news for all telecom companies. Late yesterday evening TRAI had sent its final recommendation on the pricing of 2G spectrum. Remember, this was something that originally started in May 2010 when the TRAI gave its report on telecom spectrum pricing and reallocation. The key point there is the excess spectrum that companies like Bharti or BSNL hold and on that the TRAI has gone by a recommendation of a four member expert committee that gave its report to the regulator on January 30, 2011. The crux of the report is that all spectrum with existing telecom companies, which is more than the 6.2 Mhz that is being provided under the license be repriced. This repricing has been done at a formula by linking this to the prices discovered through the recent 3G auction as a result BSNL, which holds more than 10 Mhz of spectrum in most circles across India is now facing a liability of Rs 7,276 crore. The implications are that this fee will be a one-time fee linked to the remaining period of a license that the company holds. So for instance if a Bharti acquired its telecom license in a circle like Delhi in 1995 then the period of the license is 20 years. So five years are left and through a complicated formula it will have to pay an X amount for the circle of Delhi. The total amount as per this method works out to Rs 16,235 crore for seven telecom companies. The TRAI has said that the charges will be applicable from April 1, 2010. Now, this is a crucial relief in some ways because the original demand was that this be done on a backdated retrospective basis from the date of the allotment of spectrum. So the quantum of the liability would have been much higher for a company like Bharti or Idea but that has sort of in some ways been diluted. The recommendations have been given to the Government of India and DoT late yesterday evening. Sources say they would be acted upon immediately.| Company | Liability (Rs cr) |
| BSNL | 7,276 |
| Bharti | 4,000 |
| Idea | 1,316 |
| Vodafone | 1,743 |
| MTNL | 883 |
| Aircel | 841 |
| Rel Comm | 70 |
| Total | 16,235 |
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