GSM firms oppose additional 2% charge on 3G spectrum

The Cellular Operators’ Association of India (COAI), the GSM operators’ body, has opposed the telecom regulator’s recommendation for levying an additional 2 per cent charge on 3G spectrum saying it is a “retrograde step”. The COAI also said that this would only add to the financial burden of the service providers.

The Telecom Regulatory Authority of India (Trai) has said that a fixed annual administrative charge of 2 per cent of the highest bid should be levied during the entire period of the spectrum usage.

This, the regulator said on December 9, should be in addition to the spectrum usage charge of 3-8 per cent of the companies’ annual gross revenue (AGR).

“It is first submitted that this additional charge recommended by Trai is being viewed by the entire industry and stakeholders as a retrograde step and has come as a serious setback to both Indian and foreign potential bidders for 3G. It is apprehended that the imposition of multiple levies under different heads will not only cut down the attractiveness of the sector but also create a serious negative perception of the auction process,” the COAI said in its letter.

The COAI also stated that the reasons provided by the regulator for seeking these levies were “self-contradictory”. The letter, written today, is addressed to DoT Secretary and Telecom Commission Chairman Siddhartha Behura.

TV Ramachandran, director general, COAI, said: “Representation has been made to the DoT secretary and he has advised that the matter be discussed at the Telecom Commission.”

The GSM operators’ body alleged “it is most illogical, incorrect and unfair to recommend imposition of a further charge to address a possible future implementation concern”.

Trai had said that “levying of administrative charges at a flat rate will be simple and easy to implement” as a slab system to determine spectrum charges was not “implementable”.

The GSM service providers’ body also said that these levies would add to the cost of service at a time the sector wsas burdened with a plethora of duties amounting to around 30 per cent of its revenues.