House panel for spectrum fee

Telecom operators want no entry fee for 3G.

The parliamentary standing committee on information technology has recommended that the current policy of charging a one-time entry fee and an annual spectrum fee based on a percentage of the annual gross revenue be also used for future spectrum allocation.

If the policy is retained, telecom operators will have to shell out an entry fee for the scarce third-generation spectrum and also pay 6-10 per cent and 2-4 per cent of their annual gross revenue in revenue-share and spectrum charges, respectively.

"Recognising the scarce and invaluable nature of spectrum, the government should be able to realise adequate revenue from allocations," the committee said in a report.

This recommendation contradicts what the Telecom Regulatory Authority of India (Trai) had said "" no entry fee for 3G spectrum. But the committee's recommendation is in step with the proposal of the finance ministry, which had said operators be charged a base entry fee and made to share revenue subsequently for the use of 3G spectrum.

Tata Teleservices Chairman Ratan Tata had offered to pay a one-time entry fee of Rs 1,500 crore for 3G spectrum services because it was a scarce resource. This can make the exchequer richer by a minimum of Rs 9,000 crore, assuming the big operators pay the same fee.

On the controversial issue of the allotment of the 1900 Mhz frequency band, which is currently occupied by the military, the committee has said that "spectrum that is currently available and will become available after vacation by the defence services, may be provided in a time-bound manner to both CDMA and GSM operators".

Trai, in its recommendations, had declined to offer the 1900 Mhz frequency to GSM and CDMA players on the grounds that this band could not be vacated by the defence sector.

The committee has said that the department of telecommunications needs to work out an allocation plan that will satisfy both GSM and CDMA operators.

The government, meanwhile, must allocate spectrum in accordance with international norms, it said

The committee has highlighted the operators' demands for extra spectrum in urban areas, especially in the metros, and has asked the government to release it, while adding that "opportunities be given to both GSM and CDMA technologies to expand in a balanced manner".

It has also asked the government to include suitable clauses in the licence agreement of telecom operators to ensure full utilisation of spectrum and prevent its hoarding.

CROSS-TALK

Parliamentary Committee: Existing structure of entry fee be retained

Trai: No entry fee for 3G services

Finance Ministry: One-time entry fee be charged

Ratan Tata: Entry fee of Rs 1,500 crore

Telecom Operators: No entry fee for 3G