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Indian operators likely to oppose 2G licence surcharges


Tim Ferguson

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India’s operators are likely to appeal the decision by the country’s government to levy surcharges totalling INR250 billion ($4.6 billion) existing 2G licences, Economic Times reports.

Director general of the Cellular Operators Association of India, Rajan Mathews, said the organisation’s lawyers will review the notices and then “most probably” go to the Telecom Disputes Settlement and Appellate Tribunal to pursue the matter on behalf of its members.

Following the scandal over the allocation of 2G licences in 2008, the previous approach of selling spectrum at low state-set prices was abandoned in the recent re-auction, resulting in newer entrants paying around seven times more than they would have done under the previous model.

The cabinet approved a plan in November to apply surcharges on GSM licences held by operators that have been in the market for longer, to create a level playing field between old and new operators.

The older operators have argued that the surcharges go against the conditions of their licence agreements with the government.

Industry sources say operators have received notices for payment of the surcharges from the telecommunications ministry with Bharti Airtel expected to pay INR52 billion ($944 million) and Vodafone India charged INR36 billion.

Idea Cellular faces a bill of INR18.82 billion and Reliance Communications, INR1.73 billion. Reliance will also be expected to pay a surcharge on CDMA spectrum it holds following an auction of new CDMA licences scheduled to take place in March.

The privately-owned operators face paying 53 percent of the total surcharge.

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