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DoT overstepped jurisdiction over spectrum issue, alleges Mittal
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Continuing to take offense of the Telecom Regulatory Authority of India's recent recommendations on 2G spectrum pricing, Bharti Airtel (BHARTIARTL.BO : 327.9 +4.75) has dashed off a letter to telecom minister A Raja highlighting that the regulator has overstepped its jurisdiction in deciding the matter of excess spectrum.

Trai, which came out with its recommendations in May, has suggested that the government is contractually bound to provide spectrum only up to 6.2 Mhz to operators and they should be asked to pay an excess charge for spectrum held beyond it. Bharti and other operators like Vodafone-Essar and Idea Cellular hold spectrum beyond 6.2 Mhz. In fact, Bharti and Vodafone-Essar hold 10 Mhz in some circles. Making matters worse for these companies, Trai has also linked the excess spectrum price to that of 3G spectrum, which were discovered through an auction recently.

In a letter to Raja, Bharti has said, "As stated in the Trai's recommendations that the operators have no right over spectrum beyond 6.2 Mhz is absolutely on a flawed premise as it has no adjudicatory powers and the matter is before the Supreme Court. Hence this recommendation needs to be rejected by the government as it conflicts with its own actions, guidelines and various submissions made before the Parliament".

Bharti has been critical of the Trai's recommendations in the past and termed it as "arbitrary and perverse". It has maintained that it is aimed at punishing those operators who have brought in competition, quality, and tele-density in the sector.

In its letter to Raja, Bharti has, however, said that it was willing to pay a reasonable one-time spectrum charge as a pre-requisite of the policy of migration towards a uniform spectrum charge.

Upset over the recommendations, the company has pointed out that it drives the highest economic value of the spectrum for the government, while the operators who are insisting for a one-time excess spectrum charge bring less economic value of the spectrum for the government. Such operators it said held less or the same amount of spectrum compared to Bharti but pay 5 to 6 times lower than what Bharti pays to the government as revenue share fee.

Bharti's calculations show that based on the current revenue, with marginal 8% revenue growth in the next 10 years, the company would be paying approximately Rs 20,000 crore as the annual spectrum charges while Reliance Communications (RCOM.NS : 175.1 -1.55) would pay Rs 2,864 and Tata Teleservices Rs 2,627 crore.

It has urged for parity in the government's spectrum policy, "such one-time charge should be based on the price already fixed for spectrum beyond 10 Mhz and the entry fee recently paid by the new operators. Spectrum is spectrum and it can't be priced differently for different operators".

On the issue of reframing spectrum in the 900 Mhz band and the 1800 Mhz band, the company has said that it is completely impossible in the country given the government policy of technology neutrality in using spectrum till date.
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