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Revenue may be criteria for telecom fees

Revenue may be criteria for telecom fees
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First Published: Sat, May 02 2009. 12 05 AM IST
Updated: Sat, May 02 2009. 12 05 AM IST
New Delhi: A committee studying spectrum usage charges paid by India’s mobile phone firms is likely to recommend that the government prescribe a uniform fee as a percentage of their gross revenues.
This could replace the current regime of charging firms based on the amount of radio spectrum they hold or the wireless protocol their networks run on.
For up to 4.4MHz of start-up spectrum, the companies presently pay 2% of what is called adjusted gross revenues (AGR) while for wireless usage rights of between 6.2MHz and 10MHz, they are required to pay 3% of AGR.
AGR is gross revenues net of service tax and expenses related to interconnecting phone networks that do not go to the company holding the licence.
A draft of the committee’s recommendation was reviewed by Mint. The department of telecommunications (DoT) has to approve the panel’s suggestions.
If the suggestion is accepted, it will boost the levies the exchequer receives. The government received Rs829 crore as spectrum charges from phone firms in the quarter to 31 December, according to latest available data.
“Current rules encourage operators to choose a technology based on rules that govern its use, not the inherent strength of the technology. This is unhealthy and goes against an important tenet of good regulation...which lets markets, not regulators, select winners,” said Mahesh Uppal, director at Com First (India) Pvt. Ltd, a communications consultancy.
Separately, DoT is also looking at a uniform licence fee to replace the 6-10% of AGR levied based on the licensed area.
shauvik.g@livemint.com
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First Published: Sat, May 02 2009. 12 05 AM IST
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