New Delhi, Oct. 8: Telecom players with more than 4.4 megahertz (MHz) of spectrum will have to pay a one-time fee that will be charged from October this year, according to the empowered group of ministers (EGoM).
A final call on the levy ' sources said it could be as much as Rs 27,000 crore for all the players ' will be taken by the Union cabinet, which is due to meet on October 16.
Sources told The Telegraph that the one-time fee would apply from the date of the cabinet decision. "According to the EGoM's decision, operators can pay the one-time fee in annual instalments," they added.
The rate of payment will be based on the price of spectrum in the auction to be held in November.
"We had a two-hour (EGoM) meeting today. We have tentatively resolved all the issues. We are now moving to the cabinet and will try and get it to the cabinet on October 16, if possible, so that the matter can be finalised," telecom minister Kapil Sibal told reporters after the meeting.
The government wants to clear the matter before October 19, which is the last date for submitting applications to participate in the November auction.
Existing operators said their presence in the auction hinged on the cabinet's decision.
If the cabinet accepts the EGoM's recommendation, Bharti Airtel may have to pay Rs 4,200-4,300 crore and Idea Cellular Rs 2,000-2,100 crore on the excess spectrum, said industry players.
The GSM lobby is not very hopeful of the auction's success in the wake of the EGoM's decision today.
Rajan Mathews, director-general of the Cellular Operators Association of India (COAI), which represents the interests of GSM players such as Bharti, Vodafone and Idea, said he did not expect operators to bid aggressively.
A low participation, or subdued bidding, could result in the government not earning its estimated Rs 40,000 crore from the sale of spectrum.
The EGoM had earlier met on Thursday but could not arrive at a decision in the absence of a legal opinion from the Attorney General.
Attorney General G.E. Vahanvati did give his views later, but the EGoM differed with him.
The AG had opined that a one-time charge could be levied retrospectively from July 2008 for spectrum allotted beyond 6.2 MHz but not from the date of the allocation of the excess spectrum.
Vahanvati had also said that the money should not be collected prospectively, which was what the EGoM decided today.
"Today's recommendations are likely to be challenged in court by telcos. An amendment in licence terms and conditions will be needed. These licences allow for amendment only if the government can invoke the need to protect national security or public interest," said sources.
Operators have said that the proposed levy was illegal and violated the terms of the licence that allowed them to hold spectrum for 20 years.
Not only the COAI but also the Association of Unified Service Providers in India (Auspi), which represents the CDMA lobby, had opposed the fee.
Shares of Bharti Airtel closed at Rs 270.15 on the BSE, up 4.30 points, or 1.62 per cent, from Friday's close of Rs 265.85, on a day most stocks tanked, primarily because the EGoM has suggested the fee to be collected prospectively instead of retrospectively.
Shares of Idea Cellular also rose to Rs 84.80, up 2.95 points, or 3.60 per cent, against Friday's close of Rs 81.85. R-Com shares closed positive at Rs 63.10, up 1.35 points, or 2.19 per cent, against the last close of Rs 61.75.
The telecom department had proposed three options ' a one-time levy on all airwaves held by operators; a fee on airwaves held beyond the start-up spectrum of 4.4MHz; and a fee on holdings beyond the contracted spectrum of 6.2MHz.