Govt to raise annual fees for telcos; charge for spectrum above 6.2 MHz

Mumbai: The government will charge an annual usage fee of 1-2 per cent of mobile operators' revenue for using additional airwaves in addition to a one-time levy on spectrum beyond 6.2 MHz.

The decision to levy a one-time fee, which is likely to hit major telcos, was taken at a meeting attended by prime minister Manmohan Singh, communications minister A Raja and finance minister P Chidambaram.

The additional spectrum usage charges for up to 8 MHz would be one per cent of the annual gross revenue (AGR) and for spectrum above 8 MHz, it would be two per cent of the AGR.

The Telecom Commission is likely to meet early next week to decide the quantum of the one-time charge.

The decision will affect major telecom operators like Bharti Airtel, Vodafone and Idea Cellular who possess spectrum above the 6.2 MHz that was allotted to them without any additional cost.

GSM operators get 4.4 MHz start-up spectrum (2.5 MHz in case of CDMA players) bundled with telecom licences on which they have to pay an annual fees of two per cent. This will now be raised. Up to 6.2 MHz, the operators have to pay three per cent of their AGR, while up to 8 MHz they will have to pay four per cent of their revenues, and so forth.

New players like Unitech Wireless, Datacom, Loop Telecom and Swan Telecom, will have to reach a certain subscriber level before they get additional spectrum.

The telecom department has been facing criticism for under-pricing spectrum and the issue gained credence after new telecom companies like Unitech Wireless and Swan Telecom sold stakes to foreign telecom companies for as much as five times the licence fee paid to the government.