More spectrum, uniform licence fee in new norms

New policy outlines only unified licences, delinked from spectrum

As the telecom industry looks at the Centre’s decision on spectrum pricing, Union Telecom Minister Kapil Sibal on Wednesday announced new norms on spectrum management and licensing framework.

The new norms allow for operators to hold more spectrum, liberalising mergers and acquisitions, and an uniform licence fee regime.

All future licences would be ‘Unified Licences’ that will be delinked from spectrum allocation, while all existing telecom licences would be migrated to new regime, Sibal said at a press conference here.

Despite the fear that new contours announced by the government may lead to an increase in mobile tariffs due to higher spectrum price, the minister dismissed this saying the “new measures would encourage better services and at affordable rates due to more efficient usage of spectrum”.

“There will be uniform licence fee across all telecom licenses and service areas which will progressively be made equal to 8 per cent of the Adjusted Gross Revenue (AGR) in two yearly steps starting from 2012-13.” Currently, this varies from 6-8 per cent depending on the telecom circles.

Similarly, the licence fee and spectrum usage charges payable by each of such licensee shall be on actual AGR, subject to a minimum presumptive AGR. This minimum figure would be reviewed by the Trai (Telecom Regulatory Authority of India) every year, the minister said.

This means that all operators having spectrum would have to pay a certain fee and charges whether he uses the spectrum or not, the minister added.

Sibal also said the prescribed limit on spectrum assigned to a service provider will be 2X8 MHz (paired spectrum) for GSM technology for all service areas other than Delhi and Mumbai where it will be 2x10 MHz (paired spectrum). Current prescribed limit is 2X6.2 MHz of GSM spectrum.

However, the minister said the decision on pricing of spectrum or one-time charge for extra spectrum held by some incumbent operatros would be taken later in view of the Supreme Court judgment that cancelled 122 2G licences issued in 2008.

On extension, the UAS licensee will be required to pay a fee which will be Rs 2 crore for Metro and ‘A’ circles, Rs 1 crore for ‘B’ circles and Rs 50-lakh for ‘C’ circles. However, the fee does not cover the value of spectrum, which will have to be paid for separately. Notably, spectrum assigned to the licensee in excess of the prescribed limit will be withdrawn.

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