DoT set to alter spectrum charges

7 Sep 2009

According to the Economic Times, citing an anonymous source at India’s Department of Telecommunications (DoT), the government is preparing to announce that only revenue from mobile services will be subject to spectrum charges. At present all operators pay between 2% and 6% of their total revenue towards spectrum usage charges, with the fee level dependent on the circle of operation. All revenues, including those attributed to fixed deposits, interest on savings, land rentals, equipment leasing, tower sharing and forex gains are taken into account when total revenues are calculated. Under the proposed changes companies will no longer have to include non-mobile revenues in its total, with most operators expected to save approximately 15% compared to the fees they currently pay. Despite the revision in the calculation method, the government does not expect to lose out, estimating that spectrum usage charges increase by approximately 20% each year, more than offsetting the losses that will occur from restructuring spectrum charges. It is expected, however, that as part of the new regulation the DoT will include a clause preventing operators from claiming back previously paid fees.

Changes to the methodology used to calculate mobile licence fees are also understood to be under consideration, with the DoT thought to be mulling the option of a uniform licence fee; currently operators pay between 6% and 10% of their annual revenue, again dependent on the area of operation. In separate but related news the Telecoms Regulatory Authority of India (TRAI) said it expects the government to consult with it over the possibility of a uniform licence fee, with reports that the DoT had suggested 8.5% as a suitable level. A senior DoT official indicated that the proposed 8.5% rate would go before the Telecom Commission for approval this month.