* Move to hit Bharti, Idea, Reliance Comm, Vodafone
* Officials say surcharge will create level playing field
By Devidutta Tripathy
NEW DELHI, Oct 8 (Reuters) - Long-established Indian mobile
operators face a total surcharge of at least 270 billion rupees
($5.2 billion) to continue using the airwaves, reflecting an
expected rise in prices paid by newer rivals in an upcoming
The sale, from which the government hopes to raise 400
billion rupees, was the result of the Supreme Court revoking
permits issued in a scandal-tainted auction in 2008. That did
not affect older carriers who already had spectrum.
The total 670 billion rupees will be a timely windfall for a
government looking to rein in a ballooning fiscal deficit.
The good news on Monday for the companies - including Bharti
Airtel, Reliance Communications, and
Vodafone's Indian unit - was that the surcharge will not
be backdated, and telecoms stocks rose in Mumbai.
A ministerial panel recommended mobile phone carriers be
charged for existing second-generation (2G) airwave holdings
based on the price at the auction, officials said on Monday.
The panel has recommended to the federal cabinet that
GSM-based carriers be asked to pay for airwaves beyond 4.4
megahertz at the auction-determined price, while CDMA carriers
pay for holdings beyond 2.5 megahertz, said senior government
officials who declined to be named. The cabinet has the final
India, which traditionally bundled airwaves with telecom
permits, is selling 2G airwaves for the first time through an
auction at a minimum bid price of 140 billion rupees for 5
megahertz of airwaves for all the country's 22 telecoms zones.
The auction base price is more than seven times what
carriers paid in earlier state sales.
"You have companies who now have to pay through their nose
in the auction and you have got other companies which were given
cheaper spectrum," one of the officials said. "In this very
complex situation what do you do, which can give a level playing
field and a fillip to the industry."
No.3 carrier Reliance Communications shares rose 1.9
percent, while those of Tata Teleservices (Maharashtra)
, the listed unit of sixth-ranked Tata Teleservices,
rose 4.3 percent.
Reliance Communications and Tata Teleservices are
predominantly CDMA-based carriers and do not have much airwave
holding beyond 4.4 MHz in the GSM segment. But they will have to
pay for the extra airwave they hold in the CDMA business.
The panel has recommended the older companies be allowed to
pay part of the new fee upfront and the balance in instalments.
Bharti was expected to pay 48 billion rupees as the fee,
while Idea and Vodafone were estimated to pay 18 billion rupees
and 23 billion rupees, respectively, according to Vivekanand
Subbaraman, telecoms analyst at MF Global Sify Securities in
Shares in Bharti and Idea Cellular also jumped on
what, analysts said, was a reaction to the recommendation the
fee not be charged retrospectively.
Idea is set to lose seven operating licences and has to bid
in the auction to win them back.
The panel also recommended the fees paid in 2008 by those
telecom operators set to lose their permits after the court
order be adjusted against the price in the auction or be
refunded, the officials said.