Disagreeing with telecom regulator TRAI on one-time fee for additional spectrum, Vodafone Essar today said there is no such provision in the licence and it cannot be "unilaterally and wrongfully thrust on us."
Under the current licence conditions, there is no limit of 6.2 Mhz. Hence it is erroneous to refer to it as "contracted spectrum", Vodafone Essar, which is facing a tax liability of over USD 2 billion on purchase of Hutchison stake, said in a letter to Telecom Minister Kapil Sibal.
TRAI has proposed a hefty Rs 4,571.87 crore for each Mhz (pan India) of additional 2G spectrum held by operators beyond 6.2 Mhz. The report is being examined by the Department of Telecom (DoT) and a final decision is expected soon.
The company, however, favoured auction route for all spectrum allocation in the future saying its the most optimal and efficient way of allotting the scarce natural resource.
It said the auction will introduce a consistent approach to pricing of spectrum rather than radically different approaches to charging for it, despite the fact that all operators compete in the same market.
The company asserted that any administrative approach sought to be adopted by the Government will undoubtedly run into roadblocks. Auction, on the other hand, will unlock the huge revenue opportunities of the spectrum lying unutilised with DoT, it added.
Vodafone, however, supported Sibal on delinking spectrum from licence in future, saying that it will help reforms in spectrum auction, merger and acquisition and spectrum trading.
"The common man will benefit if the scarce and precious resource of spectrum is used efficiently. This can be achieved through allocation and trading of this resource through a market based process which will not only ensure the highest value for this 'public property' but will also avoid valuable spectrum being locked up/under-utilised in low or less efficient use," Vodafone Essar said in the letter.
Sibal has already announced broad contours for framing new telecom policy 2011 in order to put in place transparent environment in the telecom industry and to facilitate a level playing field to all the telecom operators.
The company also supported, the levy of uniform licence fee across all services under various Telecom Licences.
It, however, disagreed on replacing existing roll-out obligations with the roll-out coverage based on habitation. Besides, it said, "We strongly disagree with and object to Trai recommendation that failure to fulfill the rollout obligations would entail penalty in the form of additional spectrum usage charges.
"This recommendation is illogical and untenable as higher spectrum charges have no nexus with non-fulfilment of rollout obligations," it added.