No admin tax for 3G, annual fee set at 3%

22 Dec 2008

Reuters is reporting that Indian’s Telecom Commission has rejected proposals from the Telecoms Regulatory Authority of India (TRAI) to successful bidders in the upcoming 3G auctions 2% of the highest bid amount annually as an administrative charge for using the spectrum. The commission has, however, agreed with a higher annual spectrum fee which had been proposed by the Department of Telecommunications (DoT), and backed by the TRAI. The DoT had criticised the TRAI’s recommendations for an administrative charge, claiming if implemented it could reduce revenues from the auction process by as much as INR50 billion (USD1 billion). The annual spectrum fee for operators which only offer 3G services will rise from 1% of revenue to 3% of revenues following the commission’s decision. Existing operators with 2G services will be charged between 3% and 8% of revenues, dependent on the spectrum each company holds.