Government weighing 8 per cent levy on spectrum

Mumbai: The government is considering an eight per cent levy on annual gross revenue (AGR) of service providers for up to 5 MHz of spectrum, as proposed by the spectrum valuation and pricing committee.

"The spectrum charges may be levied on licences under UASL regime at a flat rate of 8 per cent of AGR for up to 5 MHz of subscriber access spectrum, irrespective of the type of technology deployed and the quantum of spectrum held," the committee said in its report to the telecom commission.

Currently, telecom operators are paying in the range of 2-6 per cent of their AGR for 4.4-15 MHz.

In addition, the committee has also suggested that service providers may be charged one per cent of AGR extra for each MHz of additional spectrum.

The commission will meet on January 15 to consider the report.

Official sources, however, argue that the imposition of an eight per cent levy would have no impact on mobile tariffs as operators spend up to 50 per cent of their revenues on marketing and sales alone.
 
Telecom sector regulator TRAI had also recommended increase in spectrum charges paid by the service providers.

The revenue share increases with the amount of spectrum allotted to ensure that service providers make use of new technological features for enhancing spectrum efficiency.

The government, meanwhile, said spectrum allocation to new telecom players would be made on the basis of seniority in payment of deposit licence fee.

Nine companies, including Unitech, Datacom, Shyam Telelink and Swan Communications, are in the race to get spectrum.