The one-time fee is likely to hit major telcos having spectrum above 6.2 MHz. Having drawn flak for under-pricing spectrum, the government today decided to levy a one-time charge for spectrum above 6.2 MHz in addition to the licence fees and also raised the annual usage charges. The decision was taken at a meeting attended by Communications Minister A Raja, Prime Minister Manmohan Singh and Finance Minister P Chidambaram.

The quantum of the one-time charge will be decided by the Telecom Commission (the policy-making arm of the Department of Telecommunications), which is likely to meet early next week. The one-time spectrum charge is likely to affect major telecom operators like Bharti Airtel, Vodafone and Idea Cellular who possess spectrum above the 6.2 MHz that was allotted to them without any additional cost. The new players, like Unitech Wireless, Datacom, Loop Telecom and Swan Telecom, will not be burdened as they have to reach a certain subscriber level before they get additional spectrum.

The decision comes in the wake of the criticism that the DoT has been facing regarding under-pricing spectrum. The issue caught fire after new telecom companies — Unitech Wireless and Swan Telecom — sold stakes to foreign telecom companies for an estimated five times the amount they paid as licence fee to the government for the licences.

At today’s meeting, it was also decided that the spectrum usage charges up to 8 MHz would be increased by 1 per cent of the annual gross revenue (AGR). Above 8 MHz, the charges will be increased by 2 per cent of the AGR for each of the respective slabs. GSM operators get 4.4 MHz start-up spectrum (2.5 MHz in case of CDMA players) bundled with telecom licences on which they have to pay an annual fees of 2 per cent. This will now be raised. Up to 6.2 MHz, the operators have to pay 3 per cent of their AGR, while up to 8 MHz they will have to pay 4 per cent of their revenues, and so forth.

Experts, however, said the spectrum charges were not significant revenue for the government and would not make a big difference to the exchequer.

“This is definitely a move in the right direction. However, the problem is that the price is still determined by bureaucrats and not by the market,”

said Telecom Analyst Mahesh Uppal, adding:

“There should be an attempt to reach some kind of settlement with the existing operators so that the existing or additional spectrum can be fairly auctioned.”

Telecom operators expressed disappointment with the decision. TV Ramachandran, secretary general of the Cellular Operators Association of India, said: “This is a very steep increase and it is a sad decision for the mobile operators. Our tariffs are the lowest in the world but we are being burdened by more duties and levies.”

Source: BS