New Delhi: The department of telecommunications (DoT) will ask telecom firms to make changes in how they report revenue to the government, given the need to remove the incentive for arbitrage and a proposal to restrict spectrum usage charges to activities related to the use of frequencies.
“They will report revenues separately for services from CDMA, GSM and wireline, apart from revenues from other non-telecom activities separately,” a senior DoT official said on condition of anonymity. India’s telecom companies are allowed to offer services using both mobile technologies.
“Spectrum charges are based on the quantum of spectrum each operator has. Dual technology operators hold different amounts of GSM and CDMA spectrum, and therefore would pay different amounts of revenue share,” said another senior DoT official, who didn’t want to be named as he is not authorized to speak to the media. “There are some deductions that are allowed for the computation of AGR (adjusted gross revenue). For instance, wireline revenues are not counted in the AGR.”
There will be an opportunity for savings, said Mahesh Uppal, director with Com First India Pvt. Ltd, and a telecom regulatory expert. “The spectrum usage charges are based on a graded system depending on the total amount of spectrum held. The operators obviously would not want to pay for their total holding of spectrum (both CDMA and GSM combined) as that would put them into a higher bracket. The idea is to separate them and save some money.” he said.