In a move that could hike mobile tariffs, the Centre on Friday announced steep increase in spectrum charges for all GSM and CDMA technology-based service providers, which will be effective from next fiscal (2010-11). The new charges vary between 3-8 per cent depending upon the spectrum an operator holds.
The Department of Telecommunications has said a GSM operator holding spectrum up to 4.4 Mhz will be paying 3 per cent of the AGR (adjusted gross revenue) as against 2 per cent now, while a CDMA operator with spectrum up to 5 Mhz will now have to pay 3 per cent of their AGR as spectrum charge in place of 2 per cent paid currently.
For GSM operators having spectrum up to 8.2 Mhz spectrum the charges will now go up from 4 per cent to 5 per cent and for spectrum up to 10.2 Mhz operators have to shell out 6 per cent instead of earlier 4 per cent. The operators with spectrum up to 10.2 Mhz will have to give 6 per cent instead of 4 per cent, while those with spectrum up to 12.2 Mhz will now have to pay 7 per cent against 5 per cent and for having spectrum up to 15.2 Mhz, the charge would be 8 per cent against the existing 6 per cent.
Similarly, for a CDMA player having spectrum up to 10 Mhz will be impacted more as the charges increased by 50 per cent from earlier 4 per cent to 6 per cent now. After paying licence fee, each telecom service provider has to pay a percentage of their AGR to the government as spectrum usage charge, which depends on the quantity of spectrum allotted. Increase in spectrum charges will further hit profitability of mobile operators that are already reeling under stiff competition in the fast growing mobile segment.