India sets 3G spectrum usage fees: report

Dylan Bushell-Embling
09 Sep 2009
Daily News

A panel of Indian government ministers has set the spectrum usage fee for new, 3G-only telecom carriers at 3% of total annual revenues.

And existing operators looking to expand into 3G will have to pay an additional 1% of revenue, the Economic Timesreported. These companies currently pay between 2%-6% of their revenues in usage fees, depending on how much spectrum they own.

But the panel has scrapped plans to charge an annual 2% administrative tax on successful bids for 3G spectrum following the long-awaited 3G and Wimax auctions, out of concerns operators will submit lower bids to compensate for the charges.

Had the proposal passed, winners would have had to pay 2% of the highest 3G bid in administrative charges.

The idea of a flat 1% fee has drawn criticism from some within the industry. One unnamed telecom executive told ET that the payout will be disproportionate with 3G revenues for the next several years.

The Indian government collected around 40 billion rupees ($826.6 million) in spectrum usage fees last year.

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