04-07-2008
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Join Date: Feb 2007 Location: Cochin
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Rep Power: 2  |  CDMA companies want rivals to pay for 'excess' spectrum
CDMA companies want rivals to pay for 'excess' spectrum
Quote:
After a lull, the spectrum wars between GSM and CDMA players are set to kick off again.
CDMA operators, through their industry body—Association of Unified Service Providers of India (AUSPI)—have made presentations to the finance ministry and communications ministry and have also approached the Prime Minister’s Office (PMO) and sector regulator TRAI demanding that GSM players be charged Rs 1,312 Crore per MHz for all radio frequencies they hold in excess of 4.4 MHz. CDMA operators have also added that this would bring in revenues to the tune of Rs 10,000 crore to the government.
Interestingly, the CDMA players’ proposal is largely in line with a model worked out by the finance ministry. The only difference is that the finance ministry had wanted this Rs 1,312 crore /MHz formula to be applicable to both new entrants as well as the existing players.
The finmin had wanted new entrants who had paid Rs 1,651 crore entry fee, which guarantees them 4.4 MHz of GSM spectrum, to shell an additional Rs 4,121 core based on its model. The finmin had also added that this fee must be applied to all existing GSM telcos from the time their spectrum capacity crossed 6.2 MHz limit. On this basis, several leading GSM players will have to cough up an additional Rs 3,000 crore as some telcos hold up to 10 MHz of radio frequencies.
The finance ministry has arrived at this figure as follows: The Rs 1,651 crore fee fixed in 2001, entitles 4.4 MHz of start-up spectrum, which works out to Rs 375 crore per MHz. At the same time, the fin min had estimated that telcos’ aggregate gross revenues (AGR) have increased by about 3.5 times and therefore the spectrum fee should be 3.5 times of Rs 375 crore which works out to Rs 1,312 crore for every MHz.
AUSPI, in its presentations, have argued that an additional fee of Rs 1,312 crore should be applied for all spectrum held above the 4.4 MHz limit and not 6.2 MHz as being proposed by the DoT and the finmin. Their logic: An Indian telecom licence entitles GSM players to only 4.4 MHz of spectrum. The industry body has also endorsed the finmin view of using the AGR factor when calculating the spectrum fee to arrive at the Rs 1,312 crore/MHz figure.
“We feel that the government will be benefited to the extent of more than Rs 10,000 crore as one-time levy for the already allocated spectrum beyond the contracted value,” the AUSPI presentation said.
| CDMA companies want rivals to pay for 'excess' spectrum- Telecom-News By Industry-News-The Economic Times |
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