The Hindu Business Line : GSM players want 3G auction to be held on schedule

New Delhi, Oct. 5 In a bid to prevent any delays in the auction for third-generation mobile spectrum, GSM-based cellular operators have offered a formula to the Government for separating their 3G revenues from 2G services for the purpose of calculating the annual spectrum charges.

The move from the GSM operators follow a demand by the rival CDMA camp to put the 3G auction on hold till the issue on segregation of revenues was resolved.

“The revenue separation issue is being used by some operators to scuttle the 3G auction process. But we have given a simple mechanism to the Government, whereby the revenue streams of 3G and 2G services can easily be determined for the purpose of calculating the spectrum charges,” said a GSM industry official.

Separation formula

The controversy had started after Department of Telecom had backtracked on its policy to allow the operators to separate their revenues. The decision to separate revenues is being seen as a huge incentive for 3G players to quickly roll out services, as they would have to pay only 1 per cent of their annual revenues as spectrum charges compared to a maximum of 4 per cent being paid for 2G services.

However, this decision has been put under review after the telecom regulator said that such separation may not be possible. While DoT has set up a committee to look into whether a mechanism to segregate revenues was possible or not, GSM and CDMA operators have taken opposite views on this issue.

Traffic count

In a note sent to the DoT committee, the Cellular Operators’ Association of India has suggested that the revenues can be separated by measuring the traffic carried by the two technologies. They have said that this can be done by monitoring the respective networks that carry 2G and 3G traffic.

“Since 2G and 3G cells are distinct, it is possible to sum all service traffic from 2G cells and all service traffic from 3G cells independently. This ratio can be applied to the total revenue earned by the operator to get a split,” said a GSM industry official.

CDMA operators, on the other hand, have sought for a foolproof method. If 3G operators are not allowed to separate revenues they will have to pay 5 per cent of revenues as spectrum charge and that could be a revenue hit of a few thousand crores.

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