Dual Tech Telcos Responsible For Losses of Over Rs.51977 Crore : COAI

By February 24th, 2012 AT 4:28 PM

India’s GSM industry body COAI – The Cellular operators Association of India, today said that the Government has suffered a loss of Rs.51977 crore due to owing to license and related violations by the Dual-Technology operators (Tata Docomo and Reliance) in the country.

COAI claims that Dual-Technology operators (GSM-CDMA) are in fact beneficiaries of a decision taken by DOT during the period September 2007 to March 2008. Decisions taken during this period have been held to be illegal by the Supreme Court in 2G verdict on 2nd Feb, 2012.

Further, allocation of dual spectrum (GSM/CDMA) during the said period tantamount to allocation of second license to these companies in the same service area which otherwise is not allowed as per cross holding restrictions. In our view, the spectrum allocated to Dual-Technology operators should be withdrawn and re-allocated through fair auction process.

According to COAI Dual Technology operators have also violated the rollout obligations, in accordance with the GSM spectrum allocated to them, as they were required to meet the same mandated by TRAI/ DoT for GSM services. These players are in severe non-compliance of the roll-out obligations even after almost three years of spectrum allocation – a serious issue deserving the same regulatory measures as is applicable to all other licensees/operators who were allocated GSM spectrum in 2008 and who may have failed to meet the licensed rollout obligations.

Additionally, in violation of the TRAI mandate that CDMA operators would have to acquire the requisite spectrum in the CDMA identified bands and pay auction determined prices, these operators are offering EVDO (high speed data) services on their existing spectrum, without paying the auction prices as determined by the 3G spectrum auction. This is a gross violation of the principle of “level playing field” and has caused an estimated loss of INR 14823 Crore to the Government.

The fact that Dual-Technology operators pay ongoing spectrum usage charges on a disaggregated spectrum basis as opposed to paying on a combined spectrum basis (as done by the GSM operators), causes a major loss to the government which can be estimated at about INR 26,000 Crore.

COAI further stated that there is no merit in the statement made by AUSPI in a letter to the DoT. Allocation of Spectrum beyond 6.2 MHz has been on the basis of a stringent subscriber linked criteria and is also in strict compliance with the license conditions. DOT has on affidavit in TDSAT and on the floor of the Parliament (both Rajya Sabha as well as Lok Sabha) consistently taken a position that no spectrum in excess of what was permissible has ever been granted.

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