Govt to refund telcos whose licences were cancelled

New Delhi: An Empowered Group of Ministers on Monday decided to refund licence fee of companies whose telecom licences stand cancelled but have no criminal charge against them.

The EGoM, headed by Finance Minister P Chidambaram, also decided to recommend to the Cabinet a one-time fee on existing telecom operators for spectrum they hold beyond 4.4 MHz.

The Supreme Court in February had cancelled 122 licences granted during former Telecom Minister A Raja's regime.

Operators wishing not to pay the additional fee would be allowed to relinquish the excess spectrum beyond 4.4 MHz. The one-time fee would be imposed from the day the Cabinet takes a decision on the matter.

Companies willing to retain excess spectrum will have the option of making staggered payments in yearly instalments, officials privy to the EGoM deliberations said. The government is likely to rake in about Rs 27,000 crore from the one-time fee, they added.

"If there is no case or no action is going on against telecom companies for no fault on their part (in obtaining licence in 2008), then the amount (licence fee of Rs 1,658 crore) will be refunded," an official said.

He said the government will adjust this Rs 1,658 crore against the final price of spectrum that companies, whose licences were cancelled, will have to pay at the end of the November auction of airwaves.

Government has allowed telecom companies impacted by apex court judgement to participate in auction if they are interested to continue their business.

Till 2008, telecom companies were allocated licences for pan-India business for Rs 1,658 crore and 4.4 Mhz spectrum was bundled with licences.

The government has set Rs 14,000 crore as the base or minimum price for bidding for the auction of spectrum released from cancellation of 122 licences by the Supreme Court in February this year.

"We had a two-hour meeting today. We have tentatively resolved all the issues. We are now moving to the Cabinet and will try and get it to the Cabinet on October 16, if possible, so that the matter can be finalised," Telecom Minister Kapil Sibal said after the EGoM meeting.