Sector Update: Telecom

Sector Update: Telecom

The government has decided to impose an annual licence fee of 3% of revenues on mobile operators who will offer 3G mobile services on stand-alone basis.

In a meeting on 11 November, the Department of Telecommunications (DoT) took the decision that existing 2G players, who would also offer 3G services, would have to pay 1% of their total revenue to the government as revenue share.

The Telecom Commission, however, did not take any decision on the one-time spectrum enhancement charge on 2G spectrum.

In another development, the Commission is learnt to have approved the DoT proposal to slap 1% additional spectrum usage charges for radio waves below 8 MHz and 2% above 8 MHz, effective 1 January, 2009.

Currently, the operators pay 2-6% of spectrum usage charges, which would now become 3-8%from January 2009.

This is a negative move for telecom operators more specifically for GSM operators like Bharti Airtel, Vodafone-Essar and Idea Cellular, all of whom hold spectrum up to and over 8 MHz in many circles.