In his third letter in the last one month to Prime Minister Manmohan Singh, Reliance Communications [Get Quote] chairman Anil Ambani has lambasted GSM operators yet again and, contrary to their assertion, has demanded that new operators should pay lower licence fee compared with incumbents.

GSM operators have been pushing the government for an upward revision of the licence fee for new operators (as well as existing operators going for dual spectrum usage like Reliance) on the premise that these prices were fixed a long time back (in 2001). At present, an operator has to pay Rs 1,580 crore (Rs 15.80 billion) for a pan-India licence.

Ambani, in the letter dated 26th November, points out that even as early as December 2006, GSM players, which include Vodafone, Aircel and Idea, were issued 23 licences at the prevailing fee.

On the contrary, he argues that there is a strong case for the new players to pay less.

GSM incumbents entered the high-growth market at throwaway prices of Rs 2-3 crore (Rs 20-30 million) in lucrative circles like Delhi and Mumbai, whereas new players are being charged thousands of crores.

He adds that as a result of this advantage, GSM operators have a subscriber base of 160 million and have been able to saturate the markets making it difficult for new operators to compete.

He also argues that while existing operators, like Idea and Spice, seek to obtain new licences at the 2001 fees, they want other new operators to pay more which is grossly unfair.

Ambani said that the Trai recommendation of auctioning 2G services (800, 900 & 1800 MHz) would be inappropriate as it would create unfair advantage for existing operators.

Legal opinions of four eminent lawyers submitted by GSM lobby COAI to the Department of Telecom also clearly point out that an auction process would be arbitrary and in conflict with the existing policy, licensing framework and contractual rights of existing operators, he added.

Ambani had earlier suggested that excess spectrum given to operators should be returned to the government and refarmed to new players.