Telecom panel to decide on 3G levy on Friday

The Telecom Commission, the policy-making arm of the Department of Telecommunications (DoT), will meet on Friday to take a final decision on levying the contentious 2 per cent administrative fee on successful bidders in the auction of third generation (3G) spectrum.

The Telecom Regulatory Authority of India (Trai) had, on December 9, recommended the imposition of an additional 2 per cent of the highest bid amount as annual administrative charge over and above the annual spectrum charge.

However, the regulator suggested a one-year moratorium for this payment from the date of the allocation of the spectrum to give operators time to roll out the services.

However, according to an internal note of the DoT, any increase in charges to be paid by the companies will adversely affect the upfront bid amount. The note pointed out that such a charge could reduce the revenue from the auctions by about Rs 5,000 crore. In its initial memorandum released on December 12, the DoT had stressed the need to maximise revenues from the auction.

The Telecom Commission will also decide on the number of blocks to be auctioned and the annual spectrum charge. A DoT committee has proposed that in addition to the blocks allocated to the state-owned telecom operators — Mahanagar Telephone Nigam Ltd in Delhi and Mumbai and Bharat Sanchar Nigam Ltd in the rest of India — a maximum of four blocks should be auctioned. The committee has said that in circles where 25 MHz or more is available, four blocks of 2x5 MHz should be auctioned. In the rest of the circles, all available blocks should be auctioned, it has said.

The commission is also expected to put its stamp of approval on the increase in annual spectrum charges in its upcoming meeting. The commission had, in its previous meeting last month, approved the increase in annual spectrum charges mooted by Trai.