India: Existing telecom operators may have to pay more for 3G

Posted on November 11, 2008  /  0 Comments

Existing telecom operators may have to pay more than the new players eyeing the 3G space, in the form of annual charge for the 3G spectrum. A committee chaired by Department of Telecommunications (DoT) Joint Secretary J S Deepak has recommended that an operator having 2G spectrum and 5 MHz of 3G spectrum should pay an incremental 1 per cent more than the applicable slab rate for 2G spectrum.

The committee, which was set up to suggest annual spectrum charges for 3G, has recommended that due to the efficiency in capital expenditure and synergy in operations, operators having 2G spectrum and acquiring 5 Mhz of 3G spectrum should be charged at a higher rate.

GSM 2G operators get 4.4 MHz and CDMA players get 2.5 MHz of start-up spectrum with their telecom licences, on which they have to pay an annual fees of 2 per cent of their aggregate gross revenue (AGR). For spectrum up to 6.2 MHz, the operators have to pay 3 per cent of their AGR, while for spectrum up to 8 MHz they have to pay 4 per cent of their revenues and so forth.

Therefore, for a stand-alone 3G operator, the rate will be equivalent to the 5 MHz slab rate of 2G spectrum or 3 per cent of the AGR. But operators having both 2G and 3G spectrum will have to pay one per cent over and above the present 2G slab rate.

Read the full story in Business Standard here.

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