Mumbai, Jan. 29: In a damage-control exercise, the telecom minister, Mr Kapil Sibal, on Saturday said that in future 2G spectrum will not come free with telecom licences and that operators would have to pay market-driven prices for spectrum.
The minister said new 2G operators, whose licences are not cancelled, will have to pay market-driven prices for spectrum beyond 4.4 MHz.
Earlier, an operator would get spectrum up to 6.2 MHz without any up-front charge; 4.4 MHz was given as start-up spectrum and an additional 1.8 MHz was given after getting a certain number of subscribers.
The change in policy means new operators will have to pay market prices for this additional 1.8 MHz.
“For new operators, there is no licence agreement up to 6.2 MHz, that price (for 1.8 MHz) I can decide today. They will have to pay market price for that,” the minister said while announcing the broad contours of the new National Telecom Policy.
As far as old operators like Bharti Airtel, Vodafone and Idea (who already possess spectrum above 6.2 MHz) are concerned, they will have to pay market price for spectrum beyond 6.2 MHz, said Mr Sibal.
While it appears that the old telecom players haven’t been hit by the new policy, these companies will have to pay high prices when their licences come up for renewal.
For example, Airtel’s licence for Delhi ends in November 2014 and it will need to renew it to continue offering mobile services. The telecom licences are given for 20-year periods.
“Others (old players) will also have to pay much more later. For existing operators, whose licence ends in three-four years, they will have to pay for everything,” said Mr Sibal.
The minister said the department of telecom would seek telecom regulator Trai’s recommendations on the pricing of spectrum.