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DoT dilutes pricing for excess spectrum; may cause huge losses

DoT dilutes pricing for excess spectrum; may cause huge losses
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First Published: Sun, Jul 13 2008. 01 11 PM IST
Updated: Sun, Jul 13 2008. 01 11 PM IST
PTI
New Delhi: The Department of Telecom has diluted the proposed pricing of excess spectrum held beyond the contracted limit by mobile operators, which may cause a loss of over Rs 5,000 crore every year to the government.
According to highly placed sources, the DoT had originally planned to impose annual fixed charges ranging between Rs 15 crore to Rs 290 crore (depending upon the area and amount of spectrum) and also increase the fee as percentage of gross revenues of a mobile operator.
While the revised plan envisages only a marginal increase in the annual fee as percentage of gross revenue by 1% for spectrum (radio frequency) beyond 6.2 MHz and 2% for 8 MHz and above.
This would fetch the government only Rs 1,250 crore, compared to over Rs 6,000 crore as per the original plan, sources said.
As per the original plan, the DoT had proposed annual charge of Rs290 crore for 12 MHz of spectrum in metros and also double the fee to 10 per cent of gross revenue from existing level of five per cent.
The Telecom Commission is scheduled to meet on July 18 to consider the proposal and if implemented, this will not only legalise the excess spectrum held by various mobile operators, but would also leave no scope for new operators to expand their operations due to paucity of scarce resource.
Some of the new operators, when contacted, voiced their opposition to the proposed scheme saying this was in sharp contrast to Prime Minister Manmohan Singh’s suggestion during India Telecom Summit 2007 that revenue potential of the spectrum for the government must not be lost sight of.
Communication and IT Minister A Raja also met Singh and Finance Minister P Chidambaram earlier this month and discussed the revised proposal and the same has been sent to the Telecom Commission for its approval.
Sources also said that revised pricing would be implemented both for GSM and CDMA based mobile operators having spectrum beyond 6.2 MHz in case of GSM and the equivalent amount of spectrum held by the CDMA service providers.
The new operators, who are yet to start services and have been allotted start-up 4.4 MHz of spectrum, are of the view that the DoT had earlier also succumbed to the pressures of existing mobile operators as it withdrew the report of Telecom Engineering Centre (TEC) suggesting tough subscriber linked norms for allotment of additional spectrum beyond 6.2 MHz.
Sources said that a Memorandum for Telecom Commission has been prepared based on the revised pricing regime and the same has also been distributed among various members and would be taken up for approval on July 18.
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First Published: Sun, Jul 13 2008. 01 11 PM IST