In another potential blow to India's beleaguered mobile operators, the nation's cabinet has approved a controversial proposal to charge a one-time fee for “excess” spectrum holdings over 4.4 MHz.
The cabinet is planning to charge a total of around 310 billion rupees ($5.7 billion) to incumbent operators including Bharti Airtel and Vodafone, Press Trust of India reported.
GSM operators owning more than 4.4 MHz of spectrum will be required to pay a price, to be determined by the results of next week's spectrum auctions, for all “excess” airwaves.
The base price for the upcoming GSM auction is 140 billion rupees for a 5 MHz slot.
CDMA operators with over 2.5 MHz of spectrum will probably also be required to pay a one-time fee. But as there are no bidders left for CDMA spectrum, the Department of Telecom will be asked to come up with an alternative method for determining the size of the fee.
Operators will be able to surrender their spectrum holdings beyond 4.4 MHz and 2.5 MHz respectively if they wish to avoid the fee.
Proposals to charge operators a one-time fee for large spectrum holdings have been circulating since 2010.
But Indian operators have been strongly opposed to the concept of having to trump up the fees in a time of intense competition, and with many still grappling with the large debts incurred from 3G rollouts and license fees.