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India rejigs spectrum fees for 2G and 3G services

Posted by Yogesh on Tuesday, 11 November, 2008

NEW DELHI, Nov 11 (Reuters) – Foreign telecoms firms not currently operating in India but looking to enter the world’s fastest-growing market as a third-generation (3G) services operator will have to pay more each year for spectrum.

India’s telecoms commission, the apex government body for the sector, has also decided to increase the annual fee for 2G radio spectrum by 1 percentage point across all bandwidths from January next year.

Such a move could hit firms like Bharti Airtel and Vodafone -controlled Vodafone Essar.

The government had earlier said operators winning 3G radio spectrum in a global auction due in January would have to pay 1 percent of their revenue as the annual fee.

But telecoms ministry spokesman Akshay Rout said that would be increased to 3 percent for “standalone” 3G operators.

Existing 2G operators which win 3G spectrum will be charged an annual fee according to their combined bandwidth.

Mobile operators in India at the moment provide only 2G services, and pay annual fee varying between 2-4 percent of their revenue, depending on the spectrum held.

The spokesman said a government proposal to levy a one-time “spectrum enhancement fee” on operators holding more than 6.2 Mhz of 2G spectrum also came up for consideration by the telecom commission but no decision was taken.Source Reuters

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