Entry fee of Rs 250 cr likely for 3G spectrum in metros

The government is considering an entry fee of Rs 250 crore per metro circle for allotting 3G spectrum, while for category B circles, the fee could be around Rs 150 crore.

This suggestion has apparently found favour with the finance ministry. The price of the third-generation mobile spectrum and its allocation have been one of the hotly debated issues by the government and the industry in recent times.

3G spectrum supports faster and larger quantities of data, which enables additional service offerings in the form of games, music and video using voice, video and data (together known as "triple play") and helps to bring about broadband on mobiles.

The department of telecommunications (DoT) also in-principle supports the finance ministry's suggestion on pricing of 3G spectrum, but according to sources it may not agree with this quantum of pricing as it feels it to be too high.

DoT may be looking at a cumulative Rs 200 crore entry fee for the entire country. Telecom regulator TRAI is set to come out with recommendations on 3G spectrum pricing and allocation next month.

Recently, it held meetings with individual operators as well as ministry officials concerned, like MoF and DoT, over the same issue. The pricing of 3G spectrum also involves a revenue-share of six per cent annually at this stage.

MoF wants to raise Rs 1,000 crore from each telecom company applying for 3G spectrum licenses. Prior to this, Trai, under the chairmanship of Pradip Baijal, had submitted recommendations on 3G spectrum in May 2005, in which it had suggested allocation of 3G spectrum without any additional cost.

Almost all operators barring Tata Teleservises have opposed any entry fee. Tata group supremo Ratan Tata had suggested to the government that an entry fee of Rs 1,500 crore for 3G spectrum be levied.