Mobile players have to pay spectrum from allotment date

New Delhi, Jul 30 | Updated: Jul 31 2007, 04:11am hrs
The department of telecom (DoT) has decided to continue with the policy of charging spectrum to the mobile operators from the date of earmarking of the radio waves despite the operators seeking a change in it to link it to the actual roll-out of services.

In a meeting held with DoT recently, mobile operators opposed the decision to start charging spectrum from the date of its allotment saying even if for some reasons they were unable to roll out services, they have to pay the spectrum charges which is unreasonable.

Many times operators dont start services for their own reasons and it has found instances like hoarding of spectrum. DoT cannot be a mute spectator to misuse of a key resource. The operators plea of unreasonableness to avoid the payment of spectrum charges as long as possible cannot be considered, said DoT officials.

The policy was adopted by DoT in April 2005. The operators are given a minimum six months time to start the services after they sign the license, despite that if they do not start the service, we cannot forgo spectrum charges.

Cellular operators pay Spectrum charges on revenue sharing basis at a rate of 2% of their Adjusted Gross Revenue for use of the Spectrum up to 4.4 MHz + 4.4 MHz, an additional 1% for bandwidth up to 6.2 MHz + 6.2 MHz, and another 1% for spectrum up to 10 MHz + 10 MHZ. CDMA players are charged 2 % up to 5 Mhz of spectrum. But with many operators faultering on the network rollout obligation, they have subsequently been given notices on proposed penalty which they blame on spectrum availability. DoT officials said operators want to have the spectrum and not use it for their own convenience and then hoard it, which is unlawful.