Tuesday, 22 November 2011

DoT panel accepts TRAI formula for pricing 2G spectrum

Much against the wishes of the GSM mobile operators the Department of Telecom's internal committee has accepted the formula suggested by the telecom regulator for pricing 2G spectrum. 
The committee has, however, rejected other proposals including those related to changing the roll out obligation norms, reducing licence fee to 6 per cent and relaxing mergers and acquisition norms. The committee's views have been sent to the Telecom Commission which is expected to meet on November 28 to discuss this. 

TRAI had proposed to fix Rs 4,571 crore per Mhz for all spectrum beyond 6.2 Mhz. The DoT panel has accepted this and said that the one-time fee will be calculated on a pro rata basis from May 27, 2008 till the remaining period of the licence. This will result in a huge outgo for incumbent players such as Bharti Airtel and Vodafone which have up to 10 Mhz spectrum in some circle. 
The DoT panel has also accepted TRAI's proposal to price spectrum in the 900 Mhz band 1.5 times higher. 
But the committee has not accepted TRAI's proposal to impose a uniform licence fee of 6 per cent of the annual revenues. The panel has proposed a uniform fee of 8 per cent, which is lower than the 8.5 per cent suggested by an earlier committee. 
At present, operators pay between 6 per cent and 10 per cent of their annual revenues as licence fee and infrastructure providers such as tower companies and Internet service providers do not pay any revenue share to the Government.

Source:
http://cablequest.org/news/telecom-news/item/1042-dot-panel-accepts-trai-formula-for-pricing-2g-spectrum.htmlSource: http://cablequest.org/news/telecom-news/item/1042-dot-panel-accepts-trai-formula-for-pricing-2g-spectrum.html

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