One-time spectrum charge could fetch Rs 72,792 cr

Levying a one-time charge on telecom service providers for all spectrum held could get the government Rs 72,792 crore from incumbent GSM and CDMA operators.

This has been calculated by the department of telecommunications on the assumption of a reserve price of Rs 15,000 crore for five MHz of spectrum for pan-India operations. Of this, Rs 56,048 crore would come from the 145 licensees holding GSM spectrum, including public sector utilities. The CDMA spectrum of 64 licences could yield Rs 16,744 crore.

The one-time levy could be done on a pro-rata basis, and charged as a non-interest bearing advance. It could be adjusted later with the auction price, the consultations say.

 

Recently, the Empowered Group of Ministers (EGoM) on telecom deferred a decision on whether to levy such a one-time charge. DoT has suggested if a telecom provider holds both GSM and CDMA spectrum, one block of spectrum up to 6.2 MHz of GSM and 5 MHz of CDMA per licence will be subject to a one-time charge. The operator will be given the choice to decide on one of the blocks, either GSM or CDMA, to be retained without charge.
 

THE OPTIONS

• The one-time levy could be done on a pro-rata basis, and charged as a non-interest bearing advance. It could be adjusted later with the auction price
• DoT has suggested if a telecom provider holds both GSM and CDMA spectrum, one block of spectrum up to 6.2 MHz of GSM and 5 MHz of CDMA per licence will be subject to a one-time charge. The operator will be given the choice to decide on one of the blocks, either GSM or CDMA, to be retained without charge
• The option is to charge for spectrum held above the contracted 6.2 MHz for GSM and 5 MHz for CDMA
• Permission to share spectrum will be given only after both the licensees make payments on the respective spectrum holdings, beyond the limits. The permissions would be given for 5 years

The option is to charge for spectrum held above the contracted 6.2 MHz for GSM and 5 MHz for CDMA. This, the document claims, would dilute the level field between new entrants and incumbents even further.

These new options propose that permission to share spectrum will be given only after both the licensees make payments on the respective spectrum holdings, beyond the limits. The permissions would be given for a period of five years.

“To ensure the pricing does not act as a disincentive, licensees may be permitted to pay the price on an annual basis, instead of for five years at a time, and this payment ceases if the sharing agreement is annulled midway,” the document said.