Another Twist

While the wait for auction of 3G spectrum goes on, the DoT has yet again made changes to the 3G guidelines issued in August. This time it's to do with spectrum fee to be paid by potential 3G operators. The Telecom Commission has approved DoT's proposal to charge greenfield 3G operators 3% of their Annual Gross Revenue (AGR) as annual spectrum fee. This will affect those entities that do not currently operate a 2G network in the country. An incumbent 2G operator will have to pay an additional 1% of the AGR on top of the current spectrum fee that it pays to the DoT, if it is alloted 3G spectrum after the auction. Note that the current spectrum fee ranges from 2-6% of the AGR, depending on the amount of spectrum held by the operator. The rationale behind the new policy is to maintain a level playing field between new and incumbent operators. Earlier, DoT had proposed that operators split the revenues accrued from 2G and 3G services, and pay separate spectrum fees for each.