3G: FinMin objects to revenue share

The Ministry of Finance has objected to the telecom ministry’s move to charge 1 per cent additional revenue from the successful bidder for 3G spectrum saying it may lead to deliberate suppression of revenues. The ministry has also sought the setting up of a group with representation from the Department of Economic Affairs to revisit the proposal.

According to a ministry official, the finance ministry “is of opinion that levying of 1 per cent incremental revenues will lead to practical problems, like false accounting, mainly in 2G revenues”.

This is because under the present guidelines, apart from 3G spectrum charges — which will be decided in an auction — the Department of Telecommunications (DoT) has decided to levy 1 per cent of the operators’ adjusted gross revenues (AGR) after a one-year period.

 

According to sources, this means that a 2G service provider that is already paying charges in the range of 2-5 per cent — depending on the quantum of spectrum allocated — will have to shell out additional levies for 3G.