COAI denounces one-time fee on incumbent GSM operators

COAI denounces one-time fee on incumbent GSM operators Cellular Operators Association of India (COAI) has denounces the government's decision to impose a one-time fee on existing GSM operators' spectrum beyond 4.4 MHz.

The Cabinet approved the proposal for the same on Thursday. But it postponed a decision on imposing a one-time charge on spectrum beyond 2.5 MHz held CDMA operators.

The Cabinet decided to postpone a decision about CDMA players as its pricing couldn't be determined by the imminent 2G spectrum auction because there are no bidders left for this band in the auction. Videocon and Tata Teleservices, which had applied for CDMA spectrum, have already pulled out.

COAI General Director Rajan Matthews said, "It is another nail in the coffin for us. Our licences are up for renewal in the next two-four years, so most of us will have to pay the entire amount upfront."

Matthews added that the decision would hit GSM operators very hard while CDMA operators would enjoy a decline in base auction price.

GSM players have to fork out the auction-determined price for the spectrum they own beyond 4.4 MHz from 1st of January 2013, while operators that hold spectrum beyond 6.2 MHz will have to pay retrospectively from July 2008.

Finance Minister P Chidambaram once said that the one-time fee and the auction of spectrum would fetch the government around Rs 30,000-crore in revenue. But, some top government officials said the government would get just around Rs 20,000 crore from the same during the current fiscal year - much less than Chidambaram's anticipation.

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