Govt may take decision on spectrum, pricing soon

The Telecom Ministry will soon take a decision on a controversial one-time charge for extra spectrum held by old operators and a host of other issues, including mergers and auction, spectrum pricing and auctions, on the basis of the Telecom Commission's recommendations.

According to sources, the Telecom Commission, the highest decision-making body of the Ministry, has submitted its report on spectrum and licencing-related issues to Telecom Minister Kapil Sibal, who will take a decision on them soon.

In December last year, the Telecom Commission had recommended a uniform licence fee of 8% of adjusted gross revenues, as against the existing 6-10%, depending upon the type of service and circle.

The telecom industry was demanding a lower licence fee of 6% of adjusted gross revenues (AGR) while sectoral regulator Trai had recommended a fee of 8% of AGR.

In addition, the old GSM operators have been opposing a one-time charge for extra spectrum held by them beyond 6.2 MHz, saying the allocation of airwaves was as per the policy of the government from time-to-time.

The commission had also accepted Trai's recommendations on mergers and acquisitions in the telecom space. Trai had recommended that if an entity, post-merger or acquisition, has up to a 35% market share, it would be considered in the 'green line' or safe harbour and no government intervention would be required.

However, in case a merged entity has a market share above 35%, but less than 60%, the proposal would be referred to Trai, which will carry out detailed examination to ensure that there is no abuse of market dominance.

On the controversial issue of a one-time charge for extra spectrum held by incumbent GSM operators, the Telecom Commission had said the charge will not be ruled out.

Trai had recommended that each MHz of additional spectrum held by operators above 6.2 MHz should entail a one-time cost of Rs 4,571.87 crore pan-India.

The commission has recommended that in future, additional spectrum will be allotted through the auction route.

Once Sibal has taken a view on these issues, the ministry is likely to send them to Cabinet for a final nod on implementation.