The charges vary from backbone and junction microwave to satellite links totalling to Rs 552 crore. DoT has given the option of paying it `en bloc' or by the respective circles. Meanwhile, the government has decided not to levy spectrum charges for links used in the rural areas as it is being treated as a priority service and is a loss-making one. The spectrum charges are levied on licence fee basis and royalty charges, with the licence fees calculated on the number of terminals or stations and charged on an annual basis.

Royalty charges are charged on the actual usage of bandwidth and also on the nature of deployment of the link levied on an annual basis. With this payment, BSNL will become the largest payer of spectrum charges to government. However, the quantum of payment would go up once the BSNL began offering its cellular service in a couple of months. Spectrum charges for this service would also be substantial. One of the major components DoT proposed to write off is for of the spectrum charges for the the radio systems operating in the BSNL network which is two Giga Hertz microwave links deployed mainly for junctions connectivity for rural telecom networks.

Besides, spectrum is required for Villages Public Telephones (VPT) services on the MARR system which is being replaced by Wireless in Local Lopp (WLL) systems. As BSNL is incurring loss in providing and maintaining these services, it has been decided not to levy spectrum charges for rural services. Spectrum charges form the direct revenue of the government along with revenue share and entry fee from various telecom services. Good share of spectrum revenue comes from various cellular companies for the spectrum in 900 MHz. However, with the entry of 3G mobile services, there has been spectrum auctioning in the recent times, especially in Australia and Europe.

Indian policy makers, however, not taken any decision to follow these models. Shyamal Ghosh, Secretary Department of Telecom, had recently said that Indian government has not thought of `spectrum auctioning' because there is `no clean spectrum available in the country' and 3G is long way for India. Although, Indian telecom policy makers are keenly watching the developments around the world vis-a-vis spectrum auctioning and 3G licensing.