It is believed that the Department of Telecommunications (DoT) may ask the real estate players who obtained spectrum to shell out more money. This is taking into account the substantial profits made by these companies after selling their stakes to global telecom giants, while the government obtained only Rs 16.58 billion as fee for pan-India licence. The DoT is also looking at a formula to reveal the real price for additional spectrum given to old operators beyond their contractual obligation.
Besides, the DoT feels that as it would be justified to charge Norway’s Telenor, the UAE’s Etisalat and Japan’s NTT Docomo that have picked up substantial stakes in their Indian partners and invested heavily to build telecom infrastructure, it would only be logical to ask the Indian beneficiaries to share their huge profits with the government.
The Comptroller and Auditor General of India?s (CAG) report bought three companies under the scanner, Tata Teleservices Limited, which sold its stake to NTT Docomo for Rs 129.24 billion, Unitech (brand Uninor) sold stake to Telenor for over Rs 61 billion, and Swan (now Etisalat DB) sold stake to Etisalat for Rs 32 billion.
The CAG report stated that the value of a new company with no experience in the telecom sector can primarily be taken as that of the licence and access to spectrum. This would have been the prime consideration for foreign companies while infusing a large amount of capital in the form of equity in these companies shortly after award of licence. Therefore, based on this indicator, the value of a pan-India licence works out between Rs 77.58 billion and Rs 91 billion, as against Rs16.58 billion as priced by the DoT. The total value for 122 new licences and 35 dual technology licences would be between Rs.580 billion and Rs 680 billion, as against the actual revenue of Rs 123.86 billion obtained.
Similarly, the DoT intends to tackle the question of the pricing of additional spectrum that old operators are holding beyond their contractual agreements. Meanwhile, the Telecom Regulatory Authority of India (TRAI) is still reviewing its earlier recommendation on price for additional spectrum where it favoured linking it with 3G spectrum prices, which was decried by Bharti Airtel and Vodafone Essar as they hold spectrum much beyond their contractual share.
The DoT is awaiting fresh recommendations from the TRAI.
