The Hindu Business Line : Spectrum payment norms for cellular operators may be eased

In a move that could spell relief for cellular operators, the Department of Telecom may allow payment of spectrum charges based on actual revenues instead of the existing advance payment based on estimated revenues. The financial bank guarantee for spectrum is also being reduced by 50 per cent.

Cellular operators currently pay a minimum of 2 per cent of estimated annual revenues in advance as spectrum charges. The DoT move will bring spectrum payment in line with the payment of licence fees, which the operators pay at the end of a year based on actual revenues. The financial bank guarantee for spectrum would be based on the operator's revenues for six months instead of the existing one-year period.

The Cellular Operators Association of India (COAI) said that the industry had long been demanding this, as it will reduce the burden on the operators and in turn help lower tariffs.

DoT also plans to reduce the annual licence fee to 6 per cent of the annual revenues for all operators. At present, cellular operators pay between 10 per cent and 6 per cent depending on the area of operation. This will reduce cellular tariffs even further. Licence fee for long-distance operators has already been brought down to 6 per cent.

This is part of the Communication Ministry's efforts to reduce operators' cost over a period of time. While the tariffs in India are the lowest, the duties and levies imposed on operators are on the higher side. Almost 30 per cent of the operators' revenues goes to the Government in some form or the other, according to industry estimates.

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