TRAI moots 2 percent administrative charge on highest 3G bid

December 10th, 2008 - 11:52 pm ICT by IANS  

New Delhi, Dec 10 (IANS) The Telecom Regulatory Authority of India (TRAI) Wednesday proposed two percent of the highest bid amount of third generation (3G) spectrum auction as the annual administrative charge. The TRAI in its recommendations to the Department of Telecom (DoT) said two percent of the highest bid should be paid to the government.

“As this is an additional charge on the 3G spectrum bidders, the DoT has to place this before the Telecom Commission for clearance. If okayed, this will raise the cost of licence for a 3G spectrum owner or the operator,” the statement said.

Also, stand-alone 3G players will have to pay three percent of annual gross revenue (AGR) as administrative charges. This would help the government earn about Rs.6-7 billion(Rs.600-700 crore) in revenues.

While TRAI has accepted DoT’s suggestion of no segregation in 2G and 3G revenue, at the same time it has imposed a moratorium of one year from the date of allocation of spectrum in respect of the payment of administrative charge.

“As the operators will take time to roll out their services after the allocation of spectrum, the authority recommends a moratorium of one year from the date of allocation of spectrum in respect of the payment of administrative charge,” the regulator said.

“It is being recommended as a transparent, just, fair and equitable criterion, specific to owners of the 3G spectrum,” it added.

“The all-India reserve price for 3G spectrum is Rs.2,020 crore (Rs.20.2 billion) and the number of slots to be auctioned in each circles has been referred to the finance ministry,” the regulator said, adding that it was possible to give 2G services also using the 3G spectrum and it was difficult to segregate between 2G and 3G services that could be provided using the 3G spectrum.

The entire move is expected to help the government fetch about Rs.50 billion (Rs.5,000 crore) annually.

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