DoT moots hike in spectrum charges

The Department of Telecommunications (DoT) has mooted a proposal for increasing additional spectrum charges and has also suggested slashing of one-time fixed spectrum charges.

The spectrum charges under the new proposal are lower than the earlier suggestions of the Telecom Regulatory Authority of India (Trai).

The department's Wireless Planning and Coordination (WPC) cell is seeking to define service area on the basis of population, compared with the Trai's earlier proposed economic potential criteria, sources said.

Moreover, WPC has suggested slashing the one-time fixed per MHz spectrum charge to Rs 2 crore for Category 'A' circles, Rs 1 crore for category 'B' and Rs 35 lakh for category 'C' circles. Trai had recommended Rs 16 crore, Rs 8 crore and Rs 3 crore per annum as charges for categories 'A', 'B' and 'C', respectively.

Analysts said defining service area on the basis of population would result in metros and major cities being deprived of their present category 'A' label, while certain circles with larger population, which are presently grouped under category 'C', will be elevated.

This would result in a huge cut in spectrum charges from metro circles, while it will increase the costs for operators in circles like Bihar and UP (East).

Trai has recommended a hike in spectrum usage charges to 8 per cent, 6 per cent and 4 per cent of Adjusted Gross Revenues (ADR) for Categories 'A', 'B' and 'C', respectively.

The present spectrum usage charges stand at 2 per cent of AGR for 4.4 MHz, 3 per cent of AGR for 6.2 MHz and 4 per cent of AGR for 8 and 10 Mhz.