TRAI proposes new pricing for 2G

In a move that will put additional cost on mobile companies, the Telecom Regulatory Authority of India (TRAI) suggested that the Government should collect a one-time fee from operators with 2G spectrum. TRAI has suggested an additional fee of Rs 1,769 crore per Mhz of spectrum on operators with less than 6.2 Mhz and Rs 4,571 crore per Mhz from companies with more than 6.2 Mhz. The near term financial impact of this proposal on seven incumbent operators will be about Rs 16,000 crore. Bharat Sanchar Nigam will have to pay the most at Rs 7,000 crore since they have 10 Mhz of spectrum. The long-term financial impact will be even bigger because TRAI has said that the operators will have to pay for the entire spectrum they hold when they go for renewing their licences. The Government had started giving mobile licences since 1994 for 20 years and so operators such as Bharti Airtel and Vodafone Essar will have to cough up Rs 4,571 crore for every Mhz they hold. This could mean a burden of Rs 40,000 crore over the next three to four years.