The Hindu Business Line : Spectrum no longer free for Govt

MINISTRIES and Government departments and agencies, including Defence and police authorities, will no longer be able to freeload on the scarce radio frequency spectrum allotted for their wireless needs but will have to cough up licence fees and royalties on the lines of cellular service providers from April 1, 2004.

According to official sources, this decision has been taken to ensure optimum utilisation of radio frequencies, given the sizzling growth in mobile subscribers expected in the months to come.

It forms part of the review of the spectrum policy that is being implemented based on the recommendations of a high level committee constituted by the Department of Telecommunications (DoT) jointly with the Ministry of Defence and Home Affairs in consultation with the Ministry of Finance, Information & Broadcasting and Department of Space.

The radio spectrum charges presently levied from the non-government wireless users comprise of two components - licence fee and royalty charge. Even as the Telecom Regulatory Authority of India (TRAI) is reworking these rates, at present, cellular operators shell out spectrum charges to DoT based on their usage levels as a percentage of their adjusted gross revenue (AGR).

While two per cent of AGR is collected from service providers utilising 4.4 Mhz radio frequencies, for higher spectrum allocations up to 6.2 Mhz, the company pays an additional one per cent of the AGR.

The cumulative spectrum levy works out to 4 per cent for companies in the metros who have been allotted beyond 6.2 Mhz. Royalty is calculated based on the number of frequencies utilised, bandwidth occupied, number of stations, distance etc.

No royalty or licence fee is however charged from central government ministries and organisations, while State police authorities are exempted from payment of royalty but are charged a licence fee. The move to make them pay for usage of radio frequencies will benefit the cellular operators who have been demanding more spectrum allocation.

Until now, since the Government agencies were allotted free spectrum, they refused to vacate the band, even through they had no use of it. However in the revised policy, they would now prefer to vacate the spectrum instead of paying licence fees and royalties for the same.

Once additional frequency is allotted to the service providers, the quality of mobile calls is expected to vastly improve with greater voice clarity and fewer dropped calls.