New Delhi, July 9: The Congress-led government may seriously consider the Samajwadi Partys demand to increase the licence fee for spectrum to operators, beyond their eligibility limit.
The Prime Ministers Office and the finance ministry believe the pricing of spectrum —a scarce resource —should be dynamic, reflecting demand and supply. A preferred option is an auction.
However, the Cellular Operators Association of India, representing the interests of GSM firms, is totally against any move to hike fees for spectrum already with operators, or which may be given out later.
Samajwadi Party leader Amar Singh had earlier demanded in a letter to Prime Minister Manmohan Singh that GSM operators be charged a one-time market-linked fee for spectrum held beyond 6.2 Mhz.
Currently, on paying a licence fee, GSM and CDMA operators get 4.4 Mhz and 2.5 Mhz, respectively, of spectrum per circle to launch operations. Licence conditions also provide for the allotment of GSM spectrum of up to 6.2 Mhz on achieving a minimum number of subscribers.
The finance ministry has always insisted on pricing spectrum correctly. In November 2007, the secretary, department of economic affairs, in a letter to the department of telecom (DoT) had pointed out that the latters pricing of spectrum for CDMA operators was decided way back in 2001. The pricing should not be applied to licences given out in 2007 without taking into account current valuation or any provision for inflation.
According to DoT officials, There is a suggestion to treat 6.2 Mhz of GSM spectrum as threshold and allot spectrum beyond this through auction or by charging higher licence fees.
Amar Singh wants the revenue share percentage from GSM operators for spectrum beyond 8 Mhz to be increased. Most GSM operators hold around 8 Mhz in all the major telecom circles.
Operators pay the government a percentage of their adjusted gross revenue as a spectrum charge.
Earlier, the Telecom Regulatory Authority of India had also suggested that the DoT could start levying a one-time spectrum charge on operators who want more than 10 Mhz of spectrum.
In April, the finance ministry had proposed that the DoT should charge around Rs 1,300 crore for each Mhz of 2G spectrum against the current price of around Rs 250-300 crore.