By Mukesh Jagota and R. Jai Krishna
NEW DELHI--India's federal cabinet on Thursday approved a
proposal to levy a one-time fee on telecommunication companies
holding excess airwaves beyond a specified limit, according to a
senior minister.
A panel of Indian ministers had recommended that mobile phone
companies be charged a one-time fee for the excess frequency they
own beyond a cap set by the country's telecom regulator, the
minister, who declined to be named, told Dow Jones Newswires.
The ministerial panel on bandwidth had suggested levying a total
fee of about 305 billion rupees ($5.6 billion) on all of the
companies exceeding the spectrum cap. The final fee will be based
on the prices fetched at a bandwidth auction to be held by the
government later this year.
Telecom operators that will be affected include Bharti Airtel
Ltd. (532454.BY), Idea Cellular Ltd. (532822.BY), the Indian unit
of Vodafone Group PLC (VOD.LN), Reliance Communications Ltd.
(532712.BY), Mahanagar Telephone Nigam Ltd. (500108.BY) and Tata
Teleservices Ltd.
Telecom companies have strongly opposed the fee, arguing it will
hurt them at a time when their profits are under pressure from
stiff competition and interest costs on the debt they took in 2010
to pay for third-generation bandwidth.
Write to Mukesh Jagota at mukesh.jagota@dowjones.com and R. Jai
Krishna at krishna.jai@dowjones.com
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