In a move that is certain to hit mobile operators, but substantially increase revenues for the exchequer, the Telecom Regulatory Authority of India (Trai) has given its nod to a department of telecommunications (DoT) proposal to increase spectrum usage charges by 1% of adjusted gross revenue (AGR).
According to estimates, the move will yield an additional Rs 600 crore over and above the Rs 2,000 crore earned by the government from spectrum usage charges every year. Operators currently pay 2% of revenue for up to 4.4 MHz, 3% for up to 6.2 MHz and 4% beyond that.
Trai had earlier recommended that beyond 8 MHz, revenue share charges be raised by 1%. However, DoT felt that since there are only a few cases of spectrum allotment beyond 8 MHz for GSM operators?and none for CDMA operators?the increase in revenue would be very small.
It had, accordingly, written to Trai to revisit its proposal to levy a 1% increase across the board. According to the new proposal, operators would pay charges ranging between 3% and 9% of AGR.
However, Trai has sought more details from DoT regarding a suggested one-time spectrum acquisition fee on operators for spectrum beyond 6.2 MHz. ?Details of this one-time charge scheme would necessary to examine the proposal from the legal and financial point of view.
After receipt of the details of the scheme of one-time charge, the authority shall send its recommendations to DoT,? Trai stated in a letter to DoT on Wednesday.
Earlier, Trai had recommended a one-time spectrum charge for 2G spectrum beyond 10 MHz for GSM operators and 5 MHz for CDMA operators. The regulator had suggested that for every additional 1 MHz beyond 10 MHz in Mumbai, Delhi and category A circles, operators be charged Rs 16 crore.
However, DoT had pointed out that since GSM spectrum allotment beyond 10 MHz is rare, and no spectrum allotment beyond 5 MHz for CDMA operators, no substantial additional revenue would accrue to the government. Therefore, it had suggested that the Trai mandated one-time spectrum acquisition charge be levied for any allotment beyond 6.2 MHz for GSM operators.
Interestingly, the CDMA operators also want GSM operators to be charged extra for spectrum beyond 6.2 MHz. In fact, Reliance Communications chairman Anil Ambani has written several letters to DoT and the Prime Minister in support of this demand.