The Hindu Business Line : 3G spectrum charges not on combined revenues

New Delhi, Sept. 12 Existing cellular players have got another incentive for rolling out third-generation mobile services quicker. The Department of Telecom has decided to allow operators to separate their revenues from 2G and 3G services respectively for the purpose of calculating the annual spectrum charges.

Earlier, the department was discussing about imposing the charge for 3G spectrum as an addition to the existing 2G levies. Operators currently pay a maximum of 4 per cent of their annual revenues depending on the quantum of the 2G spectrum they use.

DoT has said that operators need to pay one per cent on revenues earned from offering 3G services as spectrum charges. This means that an operator like Bharti Airtel, instead of coughing up a total of 5 per cent of their combined revenues from both 2G and 3G services, will have to pay 1 per cent on revenues from 3G services and another 4 per cent on revenues from 2G services separately.

Enabling saving

Given the average revenue per user at present is around Rs 300 per month, operators will have to pay a maximum of around Rs 3 per 3G subscriber each month to the Government under the new formula. If DoT had imposed the charge on combined revenues, then operators would have had to pay Rs 15 even for the newly acquired 3G subscriber. DoT’s decision will result in huge savings for the existing operators who win 3G spectrum.

According to industry observers, it could encourage operators to rope in more subscribers for 3G services as they have to pay a lower spectrum fee compared to what they pay for 2G services. DoT’s decision is in line with its earlier stand to allow operators with dual technology to pay spectrum charges separately. For example, Tata Teleservices, which has both GSM and CDMA mobile services, will pay spectrum charges for each service individually rather than on combined revenues.

However, the industry is still not clear on how DoT plans to separate the accounts for 2G and 3G businesses.

“It is not clear whether revenues from voice calls made by 3G subscribers will also attract just one per cent spectrum charges or DoT will allow only specific data services to be kept out as 3G revenues,” said an analyst.

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3G spectrum charges not on combined revenues