Bharti Airtel on slammed telecom regulator TRAI's recommendations on spectrum fee, saying they are retrograde and arbitrary.
The Telecom Regulatory Authority of India on Tuesday said that operators with over 6.2 Mhz of spectrum will have to pay for the additional radio waves they are holding at the 'current market price, which will be pegged to the 3G price.
If implemented, this will be a big blow to GSM players like Bharti Airtel and Idea that have well over 6.2 Mhz of spectrum and will have to cough up more to retain the additional radio waves.
"The latest recommendations by TRAI for allocation of 2G spectrum are shocking, arbitrary and retrograde. They overturn all existing policies of the DoT of the last 15 years, recommendations made by various government committees and even TRAI's own earlier recommendations," said the company, a day after the recommendations.
Given the steep bidding being witnessed in the ongoing 3G spectrum auction, Bharti may well have to fork out about Rs 5,200 crore (Rs 52 billion) for the excess spectrum beyond 6.2 Mhz, feel analysts.
Increasing competitions and all-time low tariffs have already taken a toll on the company's margins, with the company posting a decline for the first time in profit growth in the last quarter.
The latest TRAI recommendations, if implemented, will increase Bharti's financial burden, as it already has a USD 9-billion loan to repay, which it had taken for Zain Telecom's Africa assets.
The company will also have to pay a hefty amount for 3G spectrum auction if it emerges a winner. Bharti's stock fell 8.29 per cent to close at Rs 261 on BSE today, following TRAI's recommendations.
SingTel owns 32 per cent in Bharti Airtel. The operator said the recommendations are against the existing global norms for spectrum allocation and efficiency.
"It seems that the recommendations are designed to punish efficient and performing operators like us for contributing to the growth of Indian telecom sector and are instead tailor made to benefit select operators whose contribution to telecom growth and government revenues have been negligible," said the company.
"Over the years, operators like us have brought services at the lowest tariffs in the world to the door steps of the common man and connected 85 per cent of India's population, including 4.4 lakh villages," it said.
"We have invested over Rs 70,000 crore (Rs 700 billion) to build networks and services and have contributed thousand of crores to the exchequer in the form of licence, spectrum fee and other levies. In terms of spectrum charges, we have contributed up to 10 times more per Mhz than many other operators," said the Sunil Mittal company with a subscriber base of over 100 million.
We are confident that the DoT and the government will take a rational approach and summarily reject these arbitrary, impractical and perverse recommendations," it said.
