The Indian Government levied Additional Spectrum Fees for Wireless Carriers in India using 1800MHz band to provide GSM based mobile Services. Decision on 800MHz band used for CDMA Services will be taken separately.
The Scam scarred Government has tried to strike a fine balance with incumbent operators Airtel, Vodafone, Idea versus the new operators Tata DoCoMo, Uninor, potentially Videocon. They decided on the following recommendations,
- Spectrum upto 4.4MHz in 1800 band is exempt from any fees
- All spectrum holdings beyond 4.4 MHz (GSM), will attract a one-time charge directly linked to 1800MHz auction to be conducted shortly. The date of applicability of the charge will be January 1, 2013 until the remaining period of the Spectrum. Operators can surrender additional spectrum if they do not want to pay the fees.
- Further, all Spectrum held beyond 6.2MHz in 1800 band will be charged for the period July-2008 till Dec-31, 2012 at Indexation of SBI’s Prime Lending Rate
- If any of the existing operators holding just 4.4Mhz spectrum, not bought in an auction and wants to sell out, will be required to pay Rs 14,000 Cr to the Government on a Pro-Rata basis if does not hold spectrum in some circles.
What about Additional fees on 900MHz Spectrum ?
Some operators like Airtel, Vodafone, Reliance GSM, Idea and ofcourse BSNL / MTNL hold chunks of 900MHz Spectrum beyond 4.4MHz. According to TRAI, the pricing of 900Mhz is double that of 1800MHz is unlikely to be acceptable to Telecom Operators as it is ridiculously high. Further, Telecom Operators will argue that even pricing 800MHz at 1.3x times that of 1800Mhz did not attract a single bid and led to the failure of auction on a PAN India basis and not just the Top 6 Circles as I had anticipated. In lines with 800MHz spectrum, the Government will likely exempt first 2.5MHz of 900Mhz Spectrum and levy additional charges on the balance spectrum. Let’s Wait & Watch.
With all the Levies, the only thing that is certain is Mobile Tariffs will rise but maybe based on the competition on a circle by circle basis.