Business » Industry

Updated: December 27, 2011 22:36 IST

Telecom panel for uniform licence fee of 8 %

Special Correspondent
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R. Chandrasekhar. Photo: V.V.Krishnan
The Hindu
R. Chandrasekhar. Photo: V.V.Krishnan

Likely to impose one-time charges on extra 2G spectrum

In a move that would put more financial pressure on telecom operators, Telecom Commission, the decision-making body of the Department of Telecommunications, has recommended a uniform licence fee of 8 per cent of adjusted gross revenues (AGR) as against the prevalent rate of 6-8 per cent depending upon the type of service and circle a firm is operating. It is also learnt that the Telecom Commission is likely to impose one-time charges on extra 2G spectrum that operators have been holding beyond the contractual limit of 6.2 MHz.

“The universal licence fee will be implemented in two phases over a period of two years,” Telecom Secretary R. Chandrasekhar told journalists here. The Telecom Regulatory Authority of India (TRAI) had also recommended a charge of 8 per cent of AGR for deciding the license fee. The move comes as a setback for the telecom players who have been urging the DoT to lower licence fee.

Replying to queries on one-time charge of extra spectrum being held by mobile operators, Mr. Chandrasekhar said the levy of the charge could not be ruled out. The TRAI has recommended that each MHz of additional spectrum (beyond 6.2 MHz of contractual radio waves) held by operators should have one-time cost of Rs.4,571.87 crore (pan-India). Without disclosing what would be the actual price, he said the Telecom Commission had recommended that in future additional spectrum would be allotted through the auction route.

Mr. Chandrasekhar also said that the Telecom Commission had accepted the TRAI recommendation on merger and acquisition (M&A) that would help consolidation of the mobile sector that today has around a dozen players, highest in the world. “TRAI's recommendations with the cases of below 35 per cent market share and spectrum not exceeding 25 per cent of the total spectrum are cleared…above that we will be requesting the TRAI to suggest some guidelines for considering cases where the market share may be 35 per cent,” he said.

The Telecom Commission has also accepted the TRAI's recommendations on spectrum sharing that would be permitted between any two licensees holding spectrum, subject to the condition that the total bandwidth would not cross the permissible limit under mergers. The permission would be for five years, subject to renewal for one more term of five years. All these recommendations will now be sent to Communications and IT Minister Kapil Sibal for clearance and subsequently to the Cabinet for its nod.

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