In a move that is sure to hit mobile operators but substantially increase revenue for the government, the department of telecommunications is planning to levy an upfront spectrum acquisition charge.
At present, operators do not pay upfront for spectrum. They only pay an entry-licence fee of Rs 1,650 crore for a pan-Indian presence. All that may change as a telecom department proposal says the upfront fee will be charged on allocation of spectrum beyond the initial 4.4 Mhz for GSM operators and 2.5 Mhz for CDMA operators.
The move is expected to fetch the government an additional revenue of Rs 2,600 crore. The DoT is also planning to increase the annual recurring spectrum charge. Operators pay 2% for 4.4 Mhz of spectrum, 3% for 6.2 Mhz and 4% for more.
The DoT has been grappling with how to maximise revenue from spectrum, which is a scarce resource. Auctioning of spectrum has been ruled out since it may raise the issue of level playing field. This is because the current operators have not taken the auction route. The proposal is part of an internal paper prepared for broader discussions by the DoT. It has said that the Telecom Regulatory Authority of India has recommended a one-time acquisition fee for use of more than 10 Mhz of spectrum for GSM operators and 5 Mhz for CDMA operators.
Trai suggested operators be charged Rs 16 crore for every allocation of 1 Mhz of spectrum beyond 10 Mhz in Mumbai, Delhi and the category A circles. But the DoT wants to modify that stand. So, the paper says, since more than 10 Mhz of spectrum is allotted for GSM operations in rare cases, the government will not gain much from the Trai plan.
