Government to review spectrum charge for mobile operators

Mumbai: The government, which is considering the new recommendations of the telecom regulator, will review the share of revenue it levies on firms offering mobile services for the use of wireless spectrum, telecom minister A. Raja said.

The minister, however, ruled out a hike in the licence fee for telecom firms.

Telecom operators pay the government a percentage of their adjusted gross revenue (AGR) for spectrum used to transmit wireless services. The telecom tribunal had, in August, recommended raising this by one percentage point for operators holding spectrum beyond 8 mega Hertz.

The Department of Telecom is, in fact, reviewing the spectrum charges being paid by service providers, the minister said, adding, DoT has been asked to give its recommendations within 15 days.

DoT, meanwhile, has decided to enhance the number of subscriber required to be eligible for additional spectrum.

Both the Telecom Regulatory Authority of India and the Telecom Engineering Centre have already recommended a hike in spectrum charges.

The telecom regulator had suggested that the annual spectrum charges, which is a percentage of the revenues the operators earn, may be increased for more than 10 MHz. Therefore, if an operator had 10 MHz spectrum in a circle it should be asked to pay 5 per cent of its revenues instead of 4 per cent at present.

If the quantum of spectrum goes up to 12.5 MHz, the charges also increase to 6 per cent of the revenues instead of 5 per cent at present.

Raja said the government had been holding off a decision on the matter until it had fixed the minimum subscriber base operators need to be eligible for spectrum grants.

Forty-six firms have applied for GSM mobile phone licences in some or all of the country's telecom zones, and Raja said the government was processing the applications.

TRAI had also suggested that the government could start levying a one-time spectrum charge on all operators who want more than 10 MHz, and in selected zones.

However, the cellular operators have warned that higher spectrum charges could result in an increase in mobile tariffs. The Cellular Operators Association of India has already rejected the suggestions made by TRAI and TEC.