The Cellular Operators Association of India (COAI) has reacted strongly to the Cabinet decision for levying of one-time fee on spectrum holding of incumbent GSM operators.
The Cabinet has agreed to impose a one-time charge on a retrospective (beyond 6.2 MHz) & prospective (beyond 4.4 MHz) basis on the GSM operators.
Rajan S Mathews, DG, COAI stated that, "The decision is not only in violation of the license conditions through which spectrum has been allocated but also runs contrary to the affirmations given by the Government and accepted in both the Houses of the Parliament, that all spectrum granted to the operators was as per the applicable guidelines of the Government from time to time and is appropriately charged through spectrum usage charges."
Also, no clarity has been provided as to how the one-time license fee will be levied on CDMA operators, since there would be no auctions in the 800 MHz band, COAI said.
A similar situation may arise in certain circles where there may be no bidders in the upcoming 2G auction and hence no auction-determined price to calculate the one-time levy for these circles, it added.
"This will add to the woes of the operators who are concerned about the validity of the 'market-price' discovered in the upcoming 2G auction as being the true spectrum price, given that the operators are bidding under compulsion due to license cancellations and scarcity of spectrum," the COAI said.
The one-time charge decision is expected to impact the industry with an additional financial burden of approximately Rs 30,000 crore which eventually, will be passed on to the consumers in the form of increased prices for their services, the lobby said.
Mathews voiced that such a decision has been made without giving due consideration on the impact it will have on the subscriber, as well as considering the dwindling financial status of the cellular industry, which is one of the most heavily taxed industries at present in the country.