DoT for status quo on spectrum revenue-sharing formula
02 Aug 2012
The ministry of telecommunications has proposed to the union cabinet that the existing 'slab rate' system of revenue sharing for spectrum usage charge (SUC) be retained. If the proposal is accepted, it will help new entrants as they will have to pay a lower levy.
Earlier, the Telecom Regulatory Authority of India (TRAI) had proposed a flat rate of 3 per cent on the ground that the base price of Rs18,000 crore for the upcoming auction of 2G spectrum was high.
Subsequently in a meeting on 20 July, a group of cabinet ministers had recommended the existing slab rate system of revenue sharing as the preferred option and a 5 per cent flat rate as an alternative. But the telecom ministry has proposed that the existing system of revenue sharing be continued.
The cabinet is expected to meet today to take a final decision on this issue. It will also decide on the reserve price to be fixed for the upcoming auction. The empowered group of ministers, EGoM, headed by newly-appointed finance minister P Chidambaram, has proposed to fix the reserve price either at Rs14,000 crore or Rs15,000 crore for 5 Mhz of GSM spectrum in the 1800 Mhz band.
For CDMA spectrum in the 800 Mhz frequency band, the ministers propose to fix the price at 1.3 times higher than GSM spectrum.
In the existing system, for spectrum of up to 4.4 MHz in GSM, SUC is 3 per cent of revenue. In case an operator has 6.2 MHz spectrum, 4 per cent of the revenue earned using the spectrum between 4.4 MHz and 6.2 MHz will go to the government.
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